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EXHIBIT 10.2
CREDIT AGREEMENT
among
SPECIAL DEVICES, INCORPORATED,
VARIOUS BANKS
and
BANKERS TRUST COMPANY,
as Lead Arranger and Administrative Agent
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Dated as of December 15, 1998
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CREDIT AGREEMENT, dated as of December 15, 1998, among SPECIAL DEVICES,
INCORPORATED, a Delaware corporation (the "Borrower"), the Banks party hereto
from time to time and BANKERS TRUST COMPANY, as Lead Arranger and Administrative
Agent (all capitalized terms used herein and defined in Section 11 are used
herein as therein defined).
WITNESSETH:
WHEREAS, subject to and upon the terms and conditions set forth herein,
the Banks are willing to make available to the Borrower the respective credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions
set forth herein, each Bank with a Term Loan Commitment severally agrees to make
a term loan (each a "Term Loan" and, collectively, the "Term Loans") to the
Borrower, which Term Loans (i) shall be incurred by the Borrower on the Initial
Borrowing Date, (ii) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b), all
Term Loans comprising the same Borrowing shall at all times be of the same Type,
and (iii) shall be made by each such Bank in that aggregate principal amount
which does not exceed the Term Loan Commitment of such Bank on the Initial
Borrowing Date (before giving effect to the termination thereof on such date
pursuant to Section 3.03(b)). Once repaid, Term Loans incurred hereunder may not
be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Bank with a Revolving Loan Commitment severally agrees to make, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, a revolving loan or revolving loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed for any such Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Bank's
RL Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Bank at such time and (iv) shall not exceed for all such
Banks at any time outstanding that aggregate principal amount which, when added
to the sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with
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the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Total Revolving Loan
Commitment at such time.
(c) Subject to and upon the terms and conditions set forth herein, the
Swingline Bank agrees to make, at any time and from time to time on and after
the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving
loan or revolving loans (each a "Swingline Loan" and, collectively, the
"Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made and
maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance
with the provisions hereof, (iii) shall not exceed in aggregate principal amount
at any time outstanding, when combined with the aggregate principal amount of
all Revolving Loans then outstanding and the aggregate amount of all Letter of
Credit Outstandings at such time, an amount equal to the Total Revolving Loan
Commitment at such time and (iv) shall not exceed in aggregate principal amount
at any time outstanding the Maximum Swingline Amount. Notwithstanding anything
to the contrary contained in this Section 1.01(c), (x) the Swingline Bank shall
not be obligated to make any Swingline Loans at a time when a Bank Default
exists unless the Swingline Bank has entered into arrangements satisfactory to
it and the Borrower to eliminate the Swingline Bank's risk with respect to the
Defaulting Bank's or Banks' participation in such Swingline Loans, including by
cash collateralizing such Defaulting Bank's or Banks' RL Percentage of the
outstanding Swingline Loans and (y) the Swingline Bank shall not make any
Swingline Loan after it has received written notice from the Borrower, any other
Credit Party or the Required Banks stating that a Default or an Event of Default
exists and is continuing until such time as the Swingline Bank shall have
received written notice (I) of rescission of all such notices from the party or
parties originally delivering such notice or (II) of the waiver of such Default
or Event of Default by the Required Banks.
(d) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the XX Xxxxx that the Swingline Bank's outstanding
Swingline Loans shall be funded with one or more Borrowings of Revolving Loans
(provided that such notice shall be deemed to have been automatically given upon
the occurrence of a Default or an Event of Default under Section 10.05 or upon
the exercise of any of the remedies provided in the last paragraph of Section
10), in which case one or more Borrowings of Revolving Loans constituting Base
Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all XX Xxxxx pro rata based on each RL
Bank's RL Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the
proceeds thereof shall be applied directly by the Swingline Bank to repay the
Swingline Bank for such outstanding Swingline Loans. Each RL Bank hereby
irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by the Swingline
Bank notwithstanding (i) the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 6 are then satisfied, (iii) whether a Default or
an Event of Default then exists, (iv) the date of such Mandatory Borrowing and
(v) the amount of the Total Revolving Loan Commitment at such time. In the event
that any Mandatory Borrowing cannot for any reason be made on the date
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otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each RL Bank hereby agrees that it shall forthwith purchase (as
of the date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and prior to
such purchase) from the Swingline Bank such participations in the outstanding
Swingline Loans as shall be necessary to cause the XX Xxxxx to share in such
Swingline Loans ratably based upon their respective RL Percentages (determined
before giving effect to any termination of the Revolving Loan Commitments
pursuant to the last paragraph of Section 10), provided that (x) all interest
payable on the Swingline Loans shall be for the account of the Swingline Bank
until the date as of which the respective participation is required to be
purchased and, to the extent attributable to the purchased participation, shall
be payable to the participant from and after such date and (y) at the time any
purchase of participations pursuant to this sentence is actually made, the
purchasing RL Bank shall be required to pay the Swingline Bank interest on the
principal amount of participation purchased for each day from and including the
day upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the overnight Federal
Funds Rate for the first three days and at the rate otherwise applicable to Base
Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount applicable thereto. More than one Borrowing may occur
on the same date, but at no time shall there be outstanding more than ten
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur
(x) Eurodollar Loans hereunder, the Borrower shall give the Administrative Agent
at the Notice Office at least three Business Days' prior notice of each
Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans hereunder
(excluding Swingline Loans and Revolving Loans made pursuant to a Mandatory
Borrowing), the Borrower shall give the Administrative Agent at the Notice
Office at least one Business Day's prior notice of each Base Rate Loan to be
incurred hereunder, provided that (in each case) any such notice shall be deemed
to have been given on a certain day only if given before 1:00 P.M. (New York
time) on such day. Each such notice (each a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
given by the Borrower in writing, or by telephone promptly confirmed in writing,
in the form of Exhibit A, appropriately completed to specify the aggregate
principal amount of the Loans to be incurred pursuant to such Borrowing, the
date of such Borrowing (which shall be a Business Day), whether the Loans being
incurred pursuant to such Borrowing shall constitute Term Loans or Revolving
Loans, whether the Loans being incurred pursuant to such Borrowing are to be
initially maintained as Base Rate Loans or, to the extent permitted hereunder,
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Bank which
is required to make Loans of the Tranche specified in the respective Notice of
Borrowing notice of such proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Bank no later than 1:00 P.M.
(New York time) on the date that a Swingline Loan is to be incurred, written
notice or telephonic notice promptly confirmed
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in writing of each Swingline Loan to be incurred hereunder. Each such notice
shall be irrevocable and specify in each case (A) the date of Borrowing (which
shall be a Business Day) and (B) the aggregate principal amount of the Swingline
Loans to be incurred pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent or the Swingline Bank, as the case may be, may
act without liability upon the basis of telephonic notice of such Borrowing or
prepayment, as the case may be, believed by the Administrative Agent or the
Swingline Bank, as the case may be, in good faith to be from the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer,
the Treasurer or any Assistant Treasurer of the Borrower, or from any other
authorized officer of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Administrative Agent's or Swingline Bank's record of the terms of
such telephonic notice of such Borrowing or prepayment of Loans, as the case may
be, absent manifest error.
1.04 Disbursement of Funds. No later than 1:00 P.M. (New York time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, no later than 3:00 P.M. (New York time) on the date specified pursuant to
Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than
1:00 P.M. (New York time) on the date specified in Section 1.01(d)), each Bank
with a Commitment of the respective Tranche will make available its pro rata
portion (determined in accordance with Section 1.07) of each such Borrowing
requested to be made on such date (or in the case of Swingline Loans, the
Swingline Bank will make available the full amount thereof). All such amounts
will be made available in Dollars and in immediately available funds at the
Payment Office, and, except for Revolving Loans made pursuant to a Mandatory
Borrowing, the Administrative Agent will make available to the Borrower at the
Payment Office the aggregate of the amounts so made available by the Banks.
Unless the Administrative Agent shall have been notified by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may (but shall not be obligated to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Bank, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrower and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent also shall be entitled to recover on demand from such Bank
or the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the
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Administrative Agent to the Borrower until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Bank, at the overnight Federal Funds Rate and (ii) if
recovered from the Borrower, the rate of interest applicable to the respective
Borrowing, as determined pursuant to Section 1.08. Nothing in this Section 1.04
shall be deemed to relieve any Bank from its obligation to make Loans hereunder
or to prejudice any rights which the Borrower may have against any Bank as a
result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced in the Register
maintained by the Administrative Agent pursuant to Section 13.15 and shall, if
requested by such Bank, also be evidenced (i) if Term Loans, by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B-1, with blanks appropriately completed in conformity herewith (each a
"Term Note" and, collectively, the "Term Notes"), (ii) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-2, with blanks appropriately completed in conformity herewith
(each a "Revolving Note" and, collectively, the "Revolving Notes") and (iii) if
Swingline Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form Exhibit B-3, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
(b) The Term Note issued to each Bank that has a Term Loan Commitment
or outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable
to such Bank or its registered assigns and be dated the Initial Borrowing Date
(or, if issued after the Initial Borrowing Date, be dated the date of the
issuance thereof), (iii) be in a stated principal amount equal to the Term Loans
made by such Bank on the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, be in a stated principal amount equal to the outstanding
principal amount of Term Loans of such Bank at such time) and be payable in the
outstanding principal amount of Term Loans evidenced thereby, (iv) mature on the
Term Loan Maturity Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The Revolving Note issued to each Bank with a Revolving Loan
Commitment or with outstanding Revolving Loans shall (i) be executed by the
Borrower, (ii) be payable to such Bank or its registered assigns and be dated
the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be
dated the date of the issuance thereof), (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such Bank (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
Revolving Loans of such Bank at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
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(d) The Swingline Note issued to the Swingline Bank shall (i) be
executed by the Borrower, (ii) be payable to the Swingline Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in such notation shall not affect the Borrower's obligations in respect of
such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding principal amount of Loans (other than Swingline Loans which may
not be converted pursuant to this Section 1.06) made pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into a
Borrowing (of the same Tranche) of another Type of Loan, provided that, (i)
except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may not be converted
into Eurodollar Loans if a Default or an Event of Default is in existence on the
date of the conversion and the Required Banks have by notice to the Borrower
determined in their sole discretion that conversion is not appropriate, provided
that no such notice shall be required if a Default or an Event of Default under
Section 10.05 exists and is continuing, in which case Base Rate Loans may not be
converted into Eurodollar Loans, and (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar Loans
than is permitted under Section 1.02. Each such conversion shall be effected by
the Borrower by giving the Administrative Agent at the Notice Office prior to
1:00 P.M. (New York time) at least three Business Days' prior notice (each a
"Notice of Conversion") specifying the Loans to be so converted, the Borrowing
or Borrowings pursuant to which such Loans were made and, if to be converted
into Eurodollar Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans. Swingline Loans may not be converted
pursuant to this Section 1.06.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving
Loans under this Agreement shall be incurred from the Banks pro rata on the
basis of their Term Loan Commitments and Revolving Loan Commitments. It is
understood that no Bank shall be responsible for any default by any other Bank
of its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Loans hereunder.
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1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06, at a rate per annum which shall be equal to the
sum of the Applicable Base Rate Margin plus the Base Rate each as in effect from
time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of Borrowing thereof
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum which
shall, during each Interest Period applicable thereto, be equal to the sum of
the Applicable Eurodollar Rate Margin plus the Eurodollar Rate for such Interest
Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) the rate which is 2% in excess of the rate then borne by such Loans and (y)
the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans of the respective Tranche from time to time. Interest which accrues under
this Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand, provided, that
in the case of Base Rate Loans, interest shall not be payable pursuant to
preceding clause (iii) at the time of any repayment or prepayment thereof unless
the respective repayment or prepayment is made in conjunction with a permanent
reduction of the Total Revolving Loan Commitment.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to
Eurodollar Loans and shall promptly notify the Borrower and the Banks thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six-month period, provided that:
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(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Base Rate Loan) and each Interest
Period occurring thereafter in respect of such Eurodollar Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day, provided, however, that if any
Interest Period for a Eurodollar Loan would otherwise expire on a day which
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
next preceding Business Day;
(v) no Interest Period may be selected at any time when a Default or
an Event of Default is then in existence if the Required Banks have by
notice to the Borrower determined in their sole discretion that selection of
an Interest Period is not appropriate, provided that no such notice shall be
required if a Default or an Event of Default under Section 10.05 exists and
is continuing, in which case no Interest Period may be selected;
(vi) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a mandatory
repayment of Term Loans will be required to be made under Section 4.02(b),
if the aggregate principal amount of Term Loans which have Interest Periods
which will expire after such date will be in excess of the aggregate
principal amount of Term Loans then outstanding less the aggregate amount of
such required repayment; and
(vii) no Interest Period in respect of any Borrowing of Term Loans or
Revolving Loans that are maintained as Eurodollar Loans shall be selected
which extends beyond the respective Maturity Date for such Tranche of Loans.
If upon the expiration of any Interest Period applicable to a Borrowing
of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
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(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on the Loans
or Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Bank pursuant to the laws of the jurisdiction in which such Bank is
organized or in which such Bank's principal office or applicable lending
office is located or any subdivision thereof or therein), but, in any event,
without duplication of any amounts payable to such Bank under Section 4.04
(although no such Bank shall be entitled to any amounts under this Section
1.10(a)(ii) in respect of any Taxes to the extent that such Bank fails to
provide the forms or certification required to be provided by it under
Section 4.04(b)) or (B) a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances occurring since the date of this Agreement affecting such
Bank, the interbank Eurodollar market or the position of such Bank in such
market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone promptly confirmed
in writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrower and the Banks that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower,
provided that the Borrower may request that the Administrative Agent convert any
such Notice of Borrowing of Revolving Loans into a Notice of Borrowing of
Revolving Loans to be maintained as Base Rate Loans, (y) in the case of clause
(ii) above, the Borrower shall pay to such Bank, within 30 days after such
Bank's written request therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating,
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interest or otherwise as such Bank in its reasonable discretion shall determine)
as shall be required to compensate such Bank for such increased costs or
reductions in amounts received or receivable hereunder (a written notice as to
the additional amounts owed to such Bank, showing in reasonable detail the basis
for the calculation thereof, submitted to the Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take one
of the actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel such Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Bank or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank determines that after the date of this Agreement the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency, will have the effect of increasing the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such Bank
based on the existence of such Bank's Commitments hereunder or its obligations
hereunder, then the Borrower shall pay to such Bank, within 30 days after its
written demand therefor, such additional amounts as shall be required to
compensate such Bank or such other corporation for the increased cost to such
Bank or such other corporation or the reduction in the rate of return to such
Bank or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Bank will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Bank's determination of compensation owing under this Section
1.10(c) shall, absent manifest error, be final and conclusive and binding on all
the parties hereto. Each Bank, upon determining that any additional amounts will
be payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the basis
for calculation of such additional amounts.
(d) Notwithstanding anything to the contrary contained in this Section
1.10, unless a Bank gives notice to the Borrower that the Borrower is obligated
to pay any amount under this Section 1.10 within 180 days after the later of (x)
the date such Bank incurs the respective increased costs or reduction in return
the rate of return or (y) the date such Bank has actual knowledge of its
incurrence of the respective increased costs or reduction in the rate of return,
then such Bank shall only be entitled to be compensated for such amount by the
Borrower pursuant to this Section 1.10 to the extent the respective increased
costs or reduction in the rate of return are incurred or suffered on or after
the date which occurs 180 days prior to such Bank
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giving notice to the Borrower that the Borrower is obligated to pay the
respective amounts pursuant to this Section 1.10.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01, Section
4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Loans when required by the terms of this
Agreement or any Note held by such Bank or (y) any election made pursuant to
Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank, it
will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans, (y) upon the occurrence of
an event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to any Bank which results in
such Bank charging to the Borrower increased costs or (z) in the case of a
refusal by a Bank to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks as (and to the extent) provided in Section 13.12(b), the Borrower
shall have the right, if no Default or Event of Default then exists (or, in the
case of preceding clause (z), no Default or Event of Default will exist
immediately after giving effect to such replacement), to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferees, none of whom shall
constitute a Defaulting Bank at the time of such replacement (collectively, the
"Replacement Bank") and each of whom shall be required to be reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Bank shall enter into
one or more Assignment and Assumption Agreements pursuant to Section 13.04(b)
(and with all fees payable pursuant to said Section 13.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire all of
the Commitments and outstanding Loans of, and in each case participations in
Letters of Credit by,
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the Replaced Bank and, in connection therewith, shall pay to (x) the Replaced
Bank in respect thereof an amount equal to the sum of (I) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Bank, (II) an amount equal to all Unpaid Drawings that have been funded by (and
not reimbursed to) such Replaced Bank, together with all then unpaid interest
with respect thereto at such time and (III) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01,
(y) the Issuing Bank an amount equal to such Replaced Bank's RL Percentage of
any Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent
such amount was not theretofore funded by such Replaced Bank to such Issuing
Bank and (z) the Swingline Bank an amount equal to such Replaced Bank's RL
Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Bank to the Swingline Bank and (ii) all
obligations of the Borrower due and owing to the Replaced Bank at such time
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreement, the payment of
amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of the appropriate Note or
Notes executed by the Borrower, the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and
13.01), which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that the Issuing Bank
issue, at any time and from time to time on and after the Initial Borrowing Date
and prior to the 30th day prior to the Revolving Loan Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee, agent
or other similar representative for any such holders) of L/C Supportable
Obligations of the Borrower or any of its Subsidiaries, an irrevocable standby
letter of credit, in a form customarily used by the Issuing Bank or in such
other form as has been approved by the Issuing Bank (each such standby letter of
credit, a "Standby Letter of Credit"), in support of such L/C Supportable
Obligations and (y) for the account of the Borrower, an irrevocable sight
commercial letter of credit in a form customarily used by the Issuing Bank or in
such other form as has been approved by the Issuing Bank (each such commercial
letter of credit, a "Trade Letter of Credit", and each such Trade Letter of
Credit and each Standby Letter of Credit, a "Letter of Credit"), in support of
customary commercial transactions of the Borrower and its Subsidiaries. All
Letters of Credit shall be denominated in Dollars and shall be issued on a sight
basis only.
(b) Subject to and upon the terms and conditions set forth herein, the
Issuing Bank agrees that it will, at any time and from time to time on and after
the Initial Borrowing Date and prior to the 30th day prior to the Revolving Loan
Maturity Date, following its receipt of the respective Letter of Credit Request,
issue for the account of the Borrower, one or more Letters of Credit (x) in the
case of Standby Letters of Credit, in support of such L/C Supportable
Obligations of the Borrower or any of its Subsidiaries as are permitted to
remain outstanding without giving rise to a Default or an Event of Default,
hereunder and (y) in the case of Trade Letters of Credit, in support of
customary commercial transactions of the Borrower or any of its
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Subsidiaries, provided that the Issuing Bank shall be under no obligation to
issue any Letter of Credit of the types described above if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing Bank
from issuing such Letter of Credit or any requirement of law applicable to
the Issuing Bank or any request or directive (whether or not having the
force of law) from any governmental authority with jurisdiction over the
Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter
of Credit any restriction or reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated under Section 2.06 or otherwise)
not in effect on the date hereof, or any unreimbursed loss, cost or expense
which was not applicable or in effect with respect to the Issuing Bank as of
the date hereof and which the Issuing Bank reasonably and in good xxxxx
xxxxx material to it; or
(ii) the Issuing Bank shall have received notice from the Borrower, any
other Credit Party or the Required Banks prior to the issuance of such
Letter of Credit of the type described in the second sentence of Section
2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $5,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding and the aggregate
principal amount of all Swingline Loans then outstanding, an amount equal to the
Total Revolving Loan Commitment at such time and (ii) each Letter of Credit
shall by its terms terminate on or before the earlier of (x) (A) in the case of
Standby Letters of Credit, the date which occurs 12 months (or, in the case of
certain Standby Letters of Credit issued on the Initial Borrowing Date, 14
months) after the date of the issuance thereof (although any such Standby Letter
of Credit may be extendable for successive periods of up to 12 months, but not
beyond the third Business Day prior to the Revolving Loan Maturity Date, on
terms acceptable to the Issuing Bank) and (B) in the case of Trade Letters of
Credit, the date which occurs 180 days after the date of issuance thereof and
(y) thirty Business Days prior to the Revolving Loan Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the
Borrower desires that a Letter of Credit be issued for its account, the Borrower
shall give the Administrative Agent and the Issuing Bank at least five Business
Days' (or such shorter period as is acceptable to the Issuing Bank) written
notice thereof. Each notice shall be in the form of Exhibit C appropriately
completed (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.02. Unless the Issuing Bank has received notice from the Borrower, any other
Credit Party or the Required Banks before it issues a Letter of Credit that one
or more of the conditions specified in Section 5 or 6 are not then
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satisfied, or that the issuance of such Letter of Credit would violate Section
2.02, then the Issuing Bank shall, subject to the terms and conditions of this
Agreement, issue the requested Letter of Credit for the account of the Borrower
in accordance with the Issuing Bank's usual and customary practices. Upon its
issuance of or amendment or modification to any Standby Letter of Credit, the
Issuing Bank shall promptly notify the Borrower and the Administrative Agent of
such issuance, amendment or modification and such notification shall be
accompanied by a copy of the issued Letter of Credit or amendment or
modification. Upon receipt of such notification (accompanied by a copy of the
issued Letter of Credit or amendment or modification, as the case may be), the
Administrative Agent shall notify each RL Bank of such issuance, amendment or
modification, as the case may be, and, upon request by any RL Bank, shall
furnish such RL Bank with a copy of the issued Letter of Credit or amendment or
modification, as the case may be. Notwithstanding anything to the contrary
contained in this Agreement, in the event that a Bank Default exists, the
Issuing Bank shall not be required to issue any Letter of Credit unless the
Issuing Bank has entered into an arrangement satisfactory to it and the Borrower
to eliminate the Issuing Bank's risk with respect to the participation in
Letters of Credit by the Defaulting Bank or Banks, including by cash
collateralizing such Defaulting Bank's or Banks' RL Percentage of the Letter of
Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $10,000 or such lesser amount as is reasonably acceptable to the
Issuing Bank.
2.04 Letter of Credit Participations. (a) Immediately upon the issuance
by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each RL Bank, other than the Issuing Bank (each
such RL Bank, in its capacity under this Section 2.04, a "Participant"), and
each such Participant shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's RL
Percentage, in such Letter of Credit, each drawing or payment made thereunder
and the obligations of the Borrower under this Agreement with respect thereto,
and any security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or RL Percentages of the XX Xxxxx pursuant to Section
1.13 or 13.04, it is hereby agreed that, with respect to all outstanding Letters
of Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new RL Percentages
of the assignor and assignee RL Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have an obligation relative to the other Banks other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction),
shall not create for the Issuing Bank any resulting liability to the Borrower,
any other Credit Party, any Bank or any other Person.
(c) In the event that the Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 2.05(a), the Issuing Bank shall promptly
notify the Administrative Agent,
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which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to the Issuing Bank the
amount of such Participant's RL Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so notifies, prior to
11:00 A.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to the
Issuing Bank in Dollars such Participant's RL Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its RL Percentage of the amount of such
payment available to the Issuing Bank, such Participant agrees to pay to the
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Bank at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Revolving Loans maintained as Base Rate Loans for
each day thereafter. The failure of any Participant to make available to the
Issuing Bank its RL Percentage of any payment under any Letter of Credit shall
not relieve any other Participant of its obligation hereunder to make available
to the Issuing Bank its RL Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Issuing Bank such
other Participant's RL Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the Issuing Bank shall pay to each Participant
which has paid its RL Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, the Issuing Bank shall furnish
to such Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the Issuing
Bank with respect to Letters of Credit issued by it shall be irrevocable and not
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower or any Subsidiary of the Borrower and the
beneficiary named in any such Letter of Credit);
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(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
agrees to reimburse the Issuing Bank, by making payment to the Administrative
Agent in immediately available funds at the Payment Office, for any payment or
disbursement made by the Issuing Bank under any Letter of Credit (each such
amount, so paid until reimbursed, an "Unpaid Drawing"), not later than one
Business Day following receipt by the Borrower of notice of such payment or
disbursement (provided that no such notice shall be required to be given if a
Default or an Event of Default under Section 10.05 shall have occurred and be
continuing, in which case the Unpaid Drawing shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all of
which are hereby waived by the Borrower)), with interest on the amount so paid
or disbursed by the Issuing Bank, to the extent not reimbursed prior to 1:00
P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but excluding the date the Issuing Bank
was reimbursed by the Borrower therefor at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Base Rate Margin for
Revolving Loans; provided, however, to the extent such amounts are not
reimbursed prior to 1:00 P.M. (New York time) on the third Business Day
following the receipt by the Borrower of notice of such payment or disbursement
or following the occurrence of a Default or an Event of Default under Section
10.05, interest shall thereafter accrue on the amounts so paid or disbursed by
the Issuing Bank (and until reimbursed by the Borrower) at a rate per annum
which shall be the Base Rate in effect from time to time plus the Applicable
Base Rate Margin for Revolving Loans plus 2%, in each such case, with interest
to be payable on demand. The Issuing Bank shall give the Borrower prompt written
notice of each Drawing under any Letter of Credit, provided that the failure to
give any such notice shall in no way affect, impair or diminish the Borrower's
obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Bank (including in its
capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse the Issuing Bank for any wrongful payment made by the
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction).
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2.06 Increased Costs. (a) If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by the Issuing Bank or participated in by any Participant or (ii)
impose on the Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to the Issuing Bank or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by the Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for changes in the rate of tax on, or determined by reference to,
the net income or profits of the Issuing Bank or such Participant pursuant to
the laws of the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, within 30 days after the delivery of the certificate referred to
below to the Borrower by the Issuing Bank or any Participant (a copy of which
certificate shall be sent by the Issuing Bank or such Participant to the
Administrative Agent), the Borrower shall pay to the Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. The Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this Section
2.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by the Issuing Bank or
such Participant (a copy of which certificate shall be sent by the Issuing Bank
or such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate the Issuing Bank or such Participant. The certificate
required to be delivered pursuant to this Section 2.06 shall, absent manifest
error, be final and conclusive and binding on the Borrower.
(b) Notwithstanding anything to the contrary contained in this Section
2.06, unless the Issuing Bank or a Participant gives notice to the Borrower that
the Borrower is obligated to pay any amount under this Section 2.06 within 180
days after the later of (x) the date the Issuing Bank or such Participant incurs
the respective increased costs or reduction in return the rate of return or (y)
the date the Issuing Bank or such Participant has actual knowledge of its
incurrence of the respective increased costs or reduction in the rate of return,
then the Issuing Bank or such Participant shall only be entitled to be
compensated for such amount by the Borrower pursuant to this Section 2.06 to the
extent the respective increased costs or reduction in the rate of return are
incurred or suffered on or after the date which occurs 180 days prior to the
Issuing Bank or such Participant giving notice to the Borrower that the Borrower
is obligated to pay the respective amounts pursuant to this Section 2.06.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment, a
commitment commission (the "Commitment Commission") for the period from and
including the Effective Date to but excluding the Revolving Loan Maturity Date
(or such earlier date on which the Total
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Revolving Loan Commitment shall have been terminated), computed at a rate per
annum equal to the Applicable Commitment Commission Percentage on the daily
average Unutilized Revolving Loan Commitment of such Non-Defaulting Bank.
Accrued Commitment Commission shall be due and payable quarterly in arrears on
each Quarterly Payment Date and on the Revolving Loan Maturity Date (or such
earlier date on which the Total Revolving Loan Commitment shall have been
terminated).
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each RL Bank (based on each such RL Bank's respective RL
Percentage) a fee in respect of each Letter of Credit issued hereunder (the
"Letter of Credit Fee") for the period from and including the date of issuance
of such Letter of Credit to and including the date of termination or expiration
of such Letter of Credit, computed at a rate per annum equal to the Applicable
Eurodollar Rate Margin then in effect for Revolving Loans on the daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the first day
on or after the termination of the Total Revolving Loan Commitment upon which no
Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued hereunder (the
"Facing Fee") for the period from and including the date of issuance of such
Letter of Credit to and including the date of the termination of such Letter of
Credit, computed at a rate per annum equal to -1/4 of 1% on the daily Stated
Amount of such Letter of Credit, provided that in any event the minimum amount
of the Facing Fee payable in any 12 month period for each Letter of Credit shall
be $500; it being agreed that, on the date of issuance of any Letter of Credit
and on each anniversary thereof prior to the termination of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue with
respect to such Letter of Credit for the immediately succeeding 12 month period,
the full $500 shall be payable on the date of issuance of such Letter of Credit
and on each such anniversary thereof. Except as otherwise provided in the
proviso to the immediately preceding sentence, accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Bank, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit, such amount as shall at the time of such event be the administrative
charge and the reasonable expenses which the Issuing Bank is generally imposing
in connection with such occurrence with respect to letters of credit.
(e) The Borrower agrees to pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower and
the Administrative Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least
one Business Day's prior written notice to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Banks), the Borrower shall have the right, at any time or from time
to time, without premium or penalty, to terminate the Total Unutilized Revolving
Loan Commitment, in whole or in part, pursuant to this Section 3.02(a), in an
integral multiple of $100,000, in the case of partial reductions to the Total
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Unutilized Revolving Loan Commitment, provided that each such reduction shall
apply proportionately to permanently reduce the Revolving Loan Commitment of
each Bank.
(b) In the event of a refusal by a Bank to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as (and to the extent) provided
in Section 13.12(b), the Borrower may, subject to its compliance with the
requirements of Section 13.12(b), upon five Business Days' prior written notice
to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks) terminate all
of the Commitments of such Bank, so long as all Loans, together with accrued and
unpaid interest, Fees and all other amounts, owing to such Bank are repaid
concurrently with the effectiveness of such termination pursuant to Section
4.01(b) (at which time Schedule I shall be deemed modified to reflect such
changed amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to indemnifications
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 12.06 and 13.01), which shall survive as provided therein as to such
repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
each of the Commitments of each Bank) shall terminate in its entirety at 6:00
P.M. (New York time) on December 15, 1998 unless the Initial Borrowing Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank) shall terminate in its entirety on the Initial
Borrowing Date (after giving effect to the incurrence of the Term Loans on such
date).
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate in its entirety on the earlier of
(i) the date on which a Change of Control occurs and (ii) the Revolving Loan
Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date after the Initial Borrowing Date upon which a
mandatory repayment of Term Loans pursuant to any of Sections 4.02(c), 4.02(d),
4.02(e), 4.02(f) and/or 4.02(g) is required (and exceeds in amount the aggregate
principal amount of Term Loans then outstanding) or would be required if Term
Loans were then outstanding, the Total Revolving Loan Commitment shall be
permanently reduced by the amount, if any, by which the amount required to be
applied pursuant to said Sections (determined as if an unlimited amount of Term
Loans were actually outstanding) exceeds the aggregate principal amount of Term
Loans then outstanding. Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall be applied proportionately to permanently
reduce the Revolving Loan Commitment of each Bank.
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SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 1:00 P.M. (New York time) at the
Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans (or same day notice in the case of a prepayment of Swingline Loans)
and (y) at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Eurodollar Loans, whether
Term Loans, Revolving Loans or Swingline Loans shall be prepaid, the amount of
such prepayment and the Types of Loans to be prepaid and, in the case of
Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which made,
which notice the Administrative Agent shall, except in the case of Swingline
Loans, promptly transmit to each of the Banks; (ii) (x) each partial prepayment
of Term Loans pursuant to this Section 4.01(a) shall be in an aggregate
principal amount of at least $1,000,000, (y) each partial prepayment of
Revolving Loans pursuant to this Section 4.01(a) shall be in an aggregate
principal amount of at least $250,000 and (z) each partial prepayment of
Swingline Loans pursuant to this Section 4.01(a) shall be in an aggregate
principal amount of at least $50,000, provided that if any partial prepayment of
Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding
principal amount of Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) each prepayment pursuant to this Section 4.01(a)
in respect of any Revolving Loans made pursuant to a Borrowing shall be applied
pro rata among such Revolving Loans, provided that at the Borrower's election in
connection with any prepayment of Revolving Loans pursuant to this Section
4.01(a), such prepayment shall not, so long no Default or Event of Default then
exists, be applied to any Revolving Loan of a Defaulting Bank; and (iv) each
voluntary prepayment of Term Loans pursuant to this Section 4.01(a) shall be
applied, at the election of the Borrower and as specifically designated by the
Borrower in the respective notice of prepayment, to reduce the then remaining
Scheduled Repayments of Term Loans in direct order of maturity, in inverse order
of maturity or on a pro rata basis (based upon the then remaining unpaid
principal amounts of such Scheduled Repayments after giving effect to all prior
reductions thereto), provided that if the Borrower fails to so designate the
application of any such voluntary prepayment of Term Loans, such voluntary
prepayment of Term Loans shall be applied to reduce the then remaining Scheduled
Repayments of Term Loans on a pro rata basis (based upon the then remaining
unpaid principal amounts of such Scheduled Repayments after giving effect to all
prior reductions thereto).
(b) In the event of a refusal by a Bank to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as (and to the extent) provided
in Section 13.12(b), the Borrower may, upon five Business Days' prior written
notice to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks) repay all
Loans of, together with accrued and unpaid interest, Fees and other amounts
owing to, such Bank in accordance with, and subject to the requirements of, said
Section 13.12(b) so long as (A) all of the Commitments of such Bank are
terminated concurrently with such repayment pursuant to
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Section 3.02(b) (at which time Schedule I shall be deemed modified to reflect
the changed Commitments) and (B) the consents, if any, required under Section
13.12(b) in connection with the repayment pursuant to this clause (b) have been
obtained.
4.02 Mandatory Repayments. (a) On any day on which the sum of the
aggregate outstanding principal amount of the Revolving Loans, Swingline Loans
and the Letter of Credit Outstandings exceeds the Total Revolving Loan
Commitment as then in effect, the Borrower shall prepay on such day the
principal of Swingline Loans and, after all Swingline Loans have been repaid in
full (or if no Swingline Loans are outstanding), Revolving Loans in an amount
equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall pay to the Administrative Agent at the
Payment Office on such day an amount of cash and/or Cash Equivalents equal to
the amount of such excess (up to a maximum amount equal to the Letter of Credit
Outstandings at such time), such cash and/or Cash Equivalents to be held as
security for all obligations of the Borrower to the Issuing Bank and the Banks
hereunder in a cash collateral account to be established by the Administrative
Agent.
(b) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date set forth below, the Borrower shall be required to
repay that principal amount of Term Loans, to the extent then outstanding, as is
set forth opposite such date below (each such repayment, as the same may be
reduced as provided in Sections 4.01(a) and 4.02(h), a "Scheduled Repayment"):
Scheduled Repayment Date Amount
------------------------ ------
April 30, 1999 $233,333
July 31, 1999 $233,333
October 31, 1999 $233,334
January 31, 2000 $175,000
April 30, 2000 $175,000
July 31, 2000 $175,000
October 31, 2000 $175,000
January 31, 2001 $175,000
April 30, 2001 $175,000
July 31, 2001 $175,000
October 31, 2001 $175,000
January 31, 2002 $2,500,000
April 30, 2002 $2,500,000
July 31, 2002 $2,500,000
October 31, 2002 $2,500,000
January 31, 2003 $4,175,000
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April 30, 2003 $4,175,000
July 31, 2003 $4,175,000
October 31, 2003 $4,175,000
January 31, 2004 $4,500,000
April 30, 2004 $4,500,000
July 31, 2004 $4,500,000
October 31, 2004 $4,500,000
January 31, 2005 $5,800,000
April 30, 2005 $5,800,000
July 31, 2005 $5,800,000
Term Loan Maturity Date $5,800,000
(c) In addition to any other mandatory repayments pursuant to this
Section 4.02, (x) on each date on or after the Initial Borrowing Date upon which
the Borrower or any of its Subsidiaries receives any cash proceeds from any
incurrence by the Borrower or any of its Subsidiaries of Indebtedness for
borrowed money (other than Indebtedness for borrowed money permitted to be
incurred pursuant to Section 9.04 as such Section is in effect on the Effective
Date), an amount equal to 100% of the Net Debt Proceeds of the respective
incurrence of Indebtedness shall be applied on such date as a mandatory
repayment of principal of outstanding Term Loans in accordance with the
requirements of Sections 4.02(h) and (i) and (y) on each date on or after the
Initial Borrowing Date upon which the Borrower or any of its Subsidiaries
receives any cash proceeds from any incurrence by the Borrower or any of its
Subsidiaries of Indebtedness pursuant to Section 9.04(xii) or (xiii), an amount
equal to 100% of the Net Debt Proceeds of the respective incurrence of
Indebtedness shall be applied on such date as a mandatory repayment of principal
of outstanding Term Loans in accordance with the requirements of Sections
4.02(h) and (i).
(d) In addition to any other mandatory repayments pursuant to this
Section 4.02, within five Business Days after each date on or after the Initial
Borrowing Date upon which the Borrower or any of its Subsidiaries receives any
cash proceeds from any Asset Sale, an amount equal to 100% of the Net Sale
Proceeds from such Asset Sale shall be applied on such date as a mandatory
repayment of principal of outstanding Term Loans in accordance with the
requirements of Sections 4.02(h) and (i); provided that with respect to (x) no
more than $1,000,000 in the aggregate of cash proceeds from Asset Sales in any
fiscal year of the Borrower (other than cash proceeds received from any Asset
Sale pursuant to Sections 9.02(xvii) and (xxi) or from any Permitted
Sale-Leaseback Transaction (it being understood and agreed that the Net Sale
Proceeds from each Permitted Sale-Leaseback Transaction shall be applied as
provided in Sections 4.02(h) and (i))) and (y) the cash proceeds from any Asset
Sale pursuant to Sections 9.02(xvii) and (xxi), such Net Sale Proceeds therefrom
(in the case of preceding clause (x) or (y)) shall not be required to be so
applied pursuant to this Section 4.02(d) on such date to the extent that no
Default or Event of Default then exists and the Borrower has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such Net Sale Proceeds shall be used to purchase assets that replace the assets
that were the subject of such Asset Sale or assets that will be used in the
business of the Borrower or its Subsidiaries (collectively, "Replacement
Assets") within 350 days following the date of such Asset Sale (which
certificate shall set forth the
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estimates of the proceeds to be so expended), and provided further, that if all
or any portion of such Net Sale Proceeds are not so reinvested in Replacement
Assets within such 350 day period, such remaining portion shall be applied on
the last day of such period (or such earlier date, if any, as the Borrower
determines not to reinvest the Net Sale Proceeds from such Asset Sale as set
forth above) as a mandatory repayment of principal of outstanding Term Loans as
provided above in this Section 4.02(d) without regard to the immediately
preceding proviso.
(e) In addition to any other mandatory repayments pursuant to this
Section 4.02, within 10 days following each date on or after the Initial
Borrowing Date on which the Borrower or any of its Subsidiaries receives any
cash proceeds from any Recovery Event, an amount equal to 100% of the Net
Insurance Proceeds from such Recovery Event shall be applied as a mandatory
repayment of outstanding Term Loans in accordance with the requirements of
Sections 4.02(h) and (i), provided that (x) so long as no Default or Event of
Default then exists and such Net Insurance Proceeds do not exceed $5,000,000,
such Net Insurance Proceeds shall not be required to be so applied pursuant to
this Section 4.02(e) on such date to the extent that the Borrower has delivered
a certificate to the Administrative Agent on or prior to such date stating that
such Net Insurance Proceeds shall be used or shall be committed to be used to
replace or restore any properties or assets in respect of which such Net
Insurance Proceeds were paid within one year following the date of such Recovery
Event (which certificate shall set forth the estimates of the proceeds to be so
expended) and (y) so long as no Default or Event of Default then exists and if
(i) the amount of such proceeds exceeds $5,000,000, (ii) the amount of such
proceeds, together with other cash available to the Borrower and its
Subsidiaries and permitted to be spent by them on Capital Expenditures during
the relevant period pursuant to Section 9.07, equals at least 100% of the cost
of replacement or restoration of the properties or assets in respect of which
such proceeds were paid as determined by the Borrower and as supported by such
estimates or bids from contractors or subcontractors or such other supporting
information as the Administrative Agent may reasonably request, (iii) the
Borrower has delivered to the Administrative Agent a certificate on or prior to
the date the application would otherwise be required pursuant to this Section
4.02(e) in the form described in clause (x) above and also certifying its
determination as required by preceding clause (ii) and certifying the
sufficiency of business interruption insurance and other funds from operations
as required by succeeding clause (iv), and (iv) the Borrower has delivered to
the Administrative Agent such evidence as the Administrative Agent may
reasonably request in form and substance reasonably satisfactory to the
Administrative Agent establishing that the Borrower has sufficient business
interruption insurance and that the Borrower will receive payment thereunder, as
well as will have sufficient cash flow from operations, in such amounts and at
such times as are necessary to satisfy all obligations and expenses of the
Borrower (including, without limitation, all debt service requirements,
including pursuant to this Agreement), without any delay or extension thereof,
for the period from the date of the respective casualty, condemnation or other
event giving rise to the Recovery Event and continuing through the completion of
the replacement or restoration of respective properties or assets, then the
entire amount of the proceeds of such Recovery Event and not just the portion in
excess of $5,000,000 shall be deposited with the Administrative Agent pursuant
to a cash collateral arrangement reasonably satisfactory to the Administrative
Agent whereby such proceeds shall be disbursed to the Borrower from time to time
as needed to pay actual costs incurred by it or its applicable Subsidiary in
connection with the replacement or restoration of the respective properties or
assets (pursuant to such certification requirements as may be established by the
Administrative Agent), provided further that at any time while an
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Event of Default has occurred and is continuing, the Required Banks may direct
the Administrative Agent (in which case the Administrative Agent shall, and is
hereby authorized by the Borrower to, follow said directions) to apply any or
all proceeds then on deposit in such collateral account to the repayment of
Obligations hereunder, and provided further, that if all or any portion of such
proceeds not required to be applied as a mandatory repayment pursuant to the
second preceding proviso (whether pursuant to clause (x) or (y) thereof) are
either (A) not so used or committed to be so used within one year after the date
of the respective Recovery Event or (B) if committed to be used within one year
after the date of receipt of such Net Insurance Proceeds and not so used within
24 months after the date of respective Recovery Event then, in either such case,
such remaining portion not used or committed to be used in the case of preceding
clause (A) and not used in the case of preceding clause (B) shall be applied on
the date which is the first anniversary of the date of the respective Recovery
Event in the case of clause (A) above or the date occurring 24 months after the
date of the respective Recovery Event in the case of clause (B) above (or, in
either case, such earlier date, if any, as the Borrower determines not to
reinvest the Net Insurance Proceeds relating to such Recovery Event as set forth
above) as a mandatory repayment of principal of outstanding Terms Loans in
accordance with the requirements of Sections 4.02(h) and (i).
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date on or after the Initial Borrowing Date upon which the
Borrower or any of its Subsidiaries receives any cash proceeds from any capital
contribution or any sale or issuance of its equity (other than cash proceeds
received (i) as part of the Equity Financing, (ii) from the issuance by the
Borrower of (x) shares of its common stock (including as a result of the
exercise of any options with regard thereto) or (y) options to purchase shares
of its common stock, in each case, to officers, directors and employees of the
Borrower or any of its Subsidiaries, (iii) from equity contributions made to the
Borrower in an aggregate amount not to exceed $10,000,000 to the extent made by
any Person that is a shareholder of the Borrower or a partner of JFL Equity or
JFL Co-Invest in either case on the Initial Borrowing Date or (iv) from equity
contributions to any Subsidiary of the Borrower to the extent made by the
Borrower or another Subsidiary of the Borrower), an amount equal to 100% of the
Net Equity Proceeds of such capital contribution or sale or issuance of equity
shall be applied as a mandatory repayment of principal of outstanding Term Loans
in accordance with the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to the
Applicable Excess Cash Flow Percentage of the Excess Cash Flow for the relevant
Excess Cash Payment Period shall be applied as a mandatory repayment of
principal of outstanding Term Loans in accordance with the requirements of
Sections 4.02(h) and (i), provided, however, that no such repayment shall be
required pursuant to this Section 4.02(g) on any Excess Cash Payment Date if the
Leverage Ratio as of the last day of such Excess Cash Payment Period is
2.00:1.00 or less and no Default or Event of Default exists at the time that
such payment is otherwise required to be made.
(h) Each amount required to be applied to repay outstanding Term Loans
pursuant to Sections 4.02(c) through (g), inclusive, shall be applied to reduce
the then remaining Scheduled Repayments on a pro rata basis (based upon the then
remaining unpaid principal amounts of such Scheduled Repayments after giving
effect to all prior reductions thereto).
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(i) With respect to each repayment of Loans required by this Section
4.02 (including repayments resulting from the reduction of the Total Revolving
Loan Commitment pursuant to Section 3.03(d)), the Borrower may designate the
Types of Loans of the respective Tranche which are to be repaid and, in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, provided that: (i) repayments of Eurodollar Loans pursuant to this Section
4.02 may only be made on the last day of an Interest Period applicable thereto
unless all Eurodollar Loans of the respective Tranche with Interest Periods
ending on such date of required repayment and all Base Rate Loans of the
respective Tranche have been paid in full; (ii) if any repayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding
Eurodollar Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto, such Borrowing shall be converted
at the end of the then current Interest Period into a Borrowing of Base Rate
Loans; and (iii) each repayment of any Revolving Loans made pursuant to a
Borrowing shall be applied pro rata among such Revolving Loans. In the absence
of a designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion.
(j) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, (i) all then outstanding Loans of a
respective Tranche shall be repaid in full on the respective Maturity Date for
such Tranche and (ii) all then outstanding Loans shall be repaid in full on the
date on which a Change of Control occurs.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Bank or Banks entitled
thereto not later than 1:00 P.M. (New York time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or profits of a Bank pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or, in
each case, any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect to such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount
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provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for taxes imposed on or measured by
the net income or profits of such Bank pursuant to the laws of the jurisdiction
in which such Bank is organized or in which the principal office or applicable
lending office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Bank is
organized or in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank, in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence. The
Borrower will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Bank that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.04 (unless
the respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 (or successor forms) pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. In addition, each Bank agrees that
from time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, such Bank will deliver to the Borrower and the Administrative
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms), or Form W-8 (or successor form)
and a Section 4.04(b)(ii) Certificate, as the case may be, and such other forms
as may be required in order to confirm or establish the entitlement of such Bank
to a continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or such Bank shall
immediately notify the Borrower and the Administrative Agent of its inability to
deliver any such Form or Section 4.04(b)(ii) Certificate, in which case such
Bank shall not be required to deliver any such Form or Section 4.04(b)(ii)
Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, Fees or other amounts
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payable hereunder for the account of any Bank which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such Bank
has not provided to the Borrower the Internal Revenue Service Forms or the
Section 4.04(b)(ii) Certificate required to be provided to the Borrower pursuant
to this Section 4.04(b) or (II) in the case of a payment, other than interest,
to a Bank described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04, the Borrower agrees to pay any additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the immediately
preceding sentence solely as a result of any changes which are effective after
the Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such Taxes.
(c) If the Borrower pays any additional amounts under this Section 4.04
to a Bank and such Bank determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any reduction of, or
credit against, its Tax liabilities in or with respect to the taxable year in
which the additional amount is paid (a "Tax Benefit"), such Bank shall pay to
the Borrower an amount that such Bank shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by such Bank in such
year as a consequence of such Tax Benefit; provided, however, that (i) any Bank
may determine, in its sole discretion, whether to seek a Tax Benefit, (ii) any
Taxes that are imposed on a Bank as a result of a disallowance or reduction
(including through the expiration of any tax credit carryover or carryback of
such Bank that otherwise would not have expired) of any Tax Benefit with respect
to which such Bank has made a payment to the Borrower pursuant to this Section
4.04(c) shall be treated as a Tax for which the Borrower is obligated to
indemnify such Bank pursuant to this Section 4.04 without any exclusions or
defenses and (iii) nothing in this Section 4.04(c) shall require any Bank to
disclose any confidential information to the Borrower (including, without
limitation, its tax returns).
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date. The obligation of each Bank to make Loans, and the obligation of
the Issuing Bank to issue Letters of Credit, in each case on the Initial
Borrowing Date, is subject to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Banks that has requested the same the appropriate Note or Notes executed by the
Borrower and to the Swingline Bank to the extent requested by it, the Swingline
Note executed by the Borrower, in each case, in the amount, maturity and as
otherwise provided herein.
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5.02 Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate from the Borrower, dated
the Initial Borrowing Date and signed on its behalf by the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer,
any Executive Vice President or any Vice President of the Borrower, stating on
its behalf that all of the conditions in Sections 5.06, 5.07, 5.08, 5.09, 5.10
and 6.01 have been satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from (i) Xxxx, Weiss, Rifkind, Xxxxxxx
& Xxxxxxxx, special counsel to the Credit Parties, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Banks and dated the
Initial Borrowing Date covering the matters set forth in Exhibit E, (ii) Morris,
Nichols, Arset & Xxxxxxx, a reliance letter addressed to the Administrative
Agent, the Collateral Agent and each of the Banks and dated the Initial
Borrowing Date with respect to its opinion delivered in connection with the
Recapitalization, which reliance letter and opinion shall be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Banks and (iii) local counsel satisfactory to the Administrative Agent which are
located in States where one or more Mortgaged Properties are located (including,
with respect to any Mortgaged Property located in the State of California, from
White & Case LLP), opinions addressed to the Administrative Agent, the
Collateral Agent and each of the Banks and dated the Initial Borrowing Date,
each of which opinions shall be in form and substance reasonably satisfactory to
the Administrative Agent and shall cover the perfection of the security
interests granted in respect of the Security Agreement Collateral located in
such respective jurisdiction pursuant to the Security Agreement and the
Mortgages and such other matters incidental to the transactions contemplated
herein as the Administrative Agent may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate from
each Credit Party, dated the Initial Borrowing Date, signed by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, any Executive Vice President or any Vice President of such Credit
Party, and attested to by the Secretary or any Assistant Secretary of such
Credit Party, in the form of Exhibit F with appropriate insertions, together
with copies of the certificate of incorporation (or equivalent organizational
document) and by-laws of such Credit Party and the resolutions of such Credit
Party referred to in such certificate, and the foregoing shall be in form and
substance reasonably acceptable to the Administrative Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent and the Required Banks, and the Administrative Agent
shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
(c) On the Initial Borrowing Date, the corporate, ownership and capital
structure (including, without limitation, the terms of any capital stock,
options, warrants or other securities issued by the Borrower or any of its
Subsidiaries) of the Borrower and its Subsidiaries shall be in
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substantial conformity with the description thereof contained in the Senior
Subordinated Note Offering Memorandum and as to matters or specific terms not so
described shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Banks.
5.05 Plans; Shareholders' Agreements; Management Agreements; Employment
Agreements; Non-Compete Agreements; Collective Bargaining Agreements; Tax
Sharing Agreements; Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, there shall have been delivered or made available to the
Administrative Agent true and correct copies of the following documents:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related financial
and actuarial statements and opinions and other supporting statements,
certifications, schedules and information), and for each Plan that is a
"single-employer plan," as defined in Section 4001(a)(15) of ERISA, the most
recently prepared actuarial valuation therefor) and any other "employee
benefit plans," as defined in Section 3(3) of ERISA, and any other material
agreements, plans or arrangements, with or for the benefit of current or
former employees of the Borrower or any of its Subsidiaries or any ERISA
Affiliate (provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the extent
that any document described therein is in the possession of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustee of any such plan);
(ii) all collective bargaining agreements applying or relating to any
employee of the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(iii) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such entity
with respect to its capital stock in each case that will survive the
consummation of the Transaction (collectively, the "Shareholders'
Agreements");
(iv) all material agreements with members of, or with respect to, the
management of the Borrower or any of its Subsidiaries (collectively, the
"Management Agreements");
(v) all material employment agreements entered into by the Borrower
or any of its Subsidiaries (collectively, the "Employment Agreements");
(vi) any non-compete agreement entered into by the Borrower or any of
its Subsidiaries (collectively, the "Non-Compete Agreements");
(vii) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any of its Subsidiaries that will survive
the consummation of the Transaction (collectively, the "Tax Sharing
Agreements"); and
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(viii) all agreements evidencing or relating to Indebtedness of the
Borrower or any of its Subsidiaries which is to remain outstanding after
giving effect to the Effective Date (collectively, the "Existing
Indebtedness Agreements");
all of which Plans, Collective Bargaining Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements, Non-Compete Agreements, Tax
Sharing Agreement and Existing Indebtedness Agreements shall be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Banks and shall be in full force and effect on the Effective Date.
5.06 Financings. (a) On or prior to the Initial Borrowing Date, the
Borrower shall have received gross proceeds of at least $127,800,000 from the
Equity Financing (of which (x) at least $74,000,000 will be received from new
cash common equity contributions by Xxxxxx and its Affiliates and (y) no more
than $53,800,000 may be in the form of rollover equity by certain of the
existing shareholders of the Borrower).
(b) On or prior to the Initial Borrowing Date, the Borrower shall have
received gross cash proceeds of $100,000,000 from the issuance by it of a like
principal amount of the Senior Subordinated Notes.
(c) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Administrative Agent true and correct copies of the Equity
Financing Documents and the Senior Subordinated Note Documents, and all of the
terms and conditions of the Equity Financing Documents and the Senior
Subordinated Note Documents shall be in substantial conformity with the
description thereof contained in the Senior Subordinated Note Offering
Memorandum and as to matters or specific terms not so described shall be
reasonably satisfactory in form and substance to the Administrative Agent and
the Required Banks. All conditions precedent to the consummation of the Equity
Financing and the issuance of the Senior Subordinated Notes as set forth in the
Equity Financing Documents and in the Senior Subordinated Note Documents,
respectively, shall have been satisfied, and not waived unless consented to by
the Administrative Agent and the Required Banks (which consent shall not be
unreasonably withheld or delayed), to the reasonable satisfaction of the
Administrative Agent and the Required Banks. The Equity Financing and the
issuance of the Senior Subordinated Notes shall have been consummated, in each
case in all material respects in accordance with the terms and conditions of the
applicable Documents therefor and all applicable laws.
5.07 Consummation of Recapitalization. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Administrative Agent true
and correct copies of the Recapitalization Documents, with those
Recapitalization Documents which were executed on June 19, 1998 to be in the
form so executed with such changes thereto or waivers therefrom to be reasonably
satisfactory to the Administrative Agent and the Required Banks, and with all
other Recapitalization Documents to be in form and substance reasonably
satisfactory to the Administrative Agent and the Required Banks. All conditions
precedent to the consummation of the Recapitalization as set forth in the
Recapitalization Documents shall have been satisfied, and not waived unless
consented to by the Administrative Agent and the Required Banks (which consent
shall not be unreasonably withheld or delayed), to the reasonable satisfaction
of the Administrative Agent and the Required Banks. The Recapitalization shall
have been
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consummated in all material respects in accordance with the terms and conditions
of the Recapitalization Documents and all applicable laws.
5.08 Refinancing. (a) On or prior to the Initial Borrowing Date, the
total commitments in respect of the Indebtedness to be Refinanced shall have
been terminated, and all loans and notes with respect thereto shall have been
repaid in full, together with interest thereon, all letters of credit issued
thereunder shall have been terminated and all other amounts (including premiums)
owing pursuant to the Indebtedness to be Refinanced shall have been repaid in
full and all documents in respect of the Indebtedness to be Refinanced and all
guarantees with respect thereto shall have been terminated (except as to
indemnification provisions which may survive to the extent provided therein) and
be of no further force and effect.
(b) On or prior to the Initial Borrowing Date, the creditors in respect
of the Indebtedness to be Refinanced shall have terminated and released any and
all security interests and Liens on the assets owned by the Borrower and its
Subsidiaries. The Administrative Agent shall have received such releases of
security interests in and Liens on the assets owned by the Borrower and its
Subsidiaries as may have been reasonably requested by the Administrative Agent,
which releases shall be in form and substance reasonably satisfactory to the
Administrative Agent. Without limiting the foregoing, there shall have been
delivered (i) proper termination statements (Form UCC-3 or the appropriate
equivalent) for filing under the UCC of each jurisdiction where a financing
statement (Form UCC-1 or the appropriate equivalent) was filed with respect to
the Borrower or any of its Subsidiaries in connection with the security
interests created with respect to the Indebtedness to be Refinanced and the
documentation related thereto, (ii) termination or reassignment of any security
interest in, or Lien on, any patents, trademarks, copyrights, or similar
interests of the Borrower or any of its Subsidiaries on which filings have been
made, (iii) terminations of all mortgages, leasehold mortgages, deeds of trust
and leasehold deeds of trust created with respect to property of the Borrower or
any of its Subsidiaries, in each case, to secure the obligations in respect of
the Indebtedness to be Refinanced, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent and (iv) all collateral
owned by the Borrower and its Subsidiaries in the possession of any of the
creditors in respect of the Indebtedness to be Refinanced or any collateral
agent or trustee under any related security document shall have been returned to
the Borrower or its respective Subsidiary, as the case may be.
(c) The Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to it, that the matters set forth in this
Section 5.08 have been satisfied as of the Effective Date.
5.09 Adverse Change, etc. (a) Since October 31, 1998, nothing shall
have occurred (and neither the Administrative Agent nor the Banks shall have
become aware of any facts or conditions not previously known) which the
Administrative Agent or the Required Banks shall reasonably determine (a) has
had, or could reasonably be expected to have, a material adverse effect on the
rights or remedies of the Banks or the Administrative Agent, or on the ability
of any Credit Party to perform its obligations to them hereunder or under any
other Credit Document or (b) has had, or could reasonably be expected to have, a
material adverse effect on the Transaction or on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
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(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Transaction and the other transactions contemplated by the
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect (other than any novations or consents that may be required
as a result of the Recapitalization in connection with any of the Borrower's
government contracts or subcontracts thereunder), and all applicable waiting
periods with respect thereto shall have expired without any action being taken
by any competent authority which restrains, prevents or imposes materially
adverse conditions upon, the consummation of the Transaction or the other
transactions contemplated by the Documents or otherwise referred to herein or
therein. Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon, or materially delaying, or making economically unfeasible, the
consummation of the Transaction or the other transactions contemplated by the
Documents or otherwise required to herein or therein.
5.10 Litigation. On the Initial Borrowing Date, there shall be no
actions, suits or proceedings pending or threatened (i) with respect to the
Transaction, this Agreement or any other Document or (ii) which the
Administrative Agent or the Required Banks shall reasonably determine could
reasonably be expected to have a material adverse effect on (a) the Transaction
or on the business, operations, property, assets, liabilities or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole,
(b) the rights or remedies of the Banks or the Administrative Agent hereunder or
under any other Credit Document or (c) the ability of any Credit Party to
perform its respective obligations to the Banks or the Administrative Agent
hereunder or under any other Credit Document.
5.11 Pledge Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Pledge Agreement in the
form of Exhibit G (as amended, modified or supplemented from time to time, the
"Pledge Agreement") and shall have delivered to the Collateral Agent, as pledgee
thereunder, all of the Pledged Securities, if any, referred to therein and owned
by such Credit Party, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated stock
powers in the case of capital stock constituting Pledged Securities.
5.12 Security Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Security Agreement
in the form of Exhibit H (as modified, supplemented or amended from time to
time, the "Security Agreement") covering all of such Credit Party's present and
future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party or any of its Subsidiaries as debtor and that are
filed in the jurisdictions referred to in clause (i) above, together with
copies of such other financing statements that name any Credit
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Party or any of its Subsidiaries as debtor (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in respect of
which the Collateral Agent shall have received termination statements (Form
UCC-3 or the equivalent) as shall be required by local law fully executed
for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary to
perfect the security interests intended to be created by the Security
Agreement; and
(iv) evidence that all other actions necessary to perfect and protect
the security interests purported to be created by the Security Agreement
have been taken.
5.13 Subsidiaries Guaranty. On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit I (as amended, modified or
supplemented from time to time, the "Subsidiaries Guaranty").
5.14 Mortgages; Title Insurance; Landlord Waivers; etc. On the Initial
Borrowing Date, the Collateral Agent shall have received:
(i) fully executed counterparts of mortgages, deeds to secure debt or
similar documents in each case in form and substance reasonably satisfactory
to the Administrative Agent (as may be amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof, each, a
"Mortgage" and collectively, "Mortgages"), which Mortgages shall cover such
of the Real Property owned by the Borrower or any of its Subsidiaries as
designated on Schedule III (each, a "Mortgaged Property" and collectively,
the "Mortgaged Properties"), together with evidence that counterparts of the
Mortgages have been delivered to the title insurance company insuring the
Lien of the Mortgages for recording in all places to the extent necessary
or, in the reasonable opinion of the Collateral Agent, desirable to
effectively create a valid and enforceable first priority mortgage lien,
subject only to Permitted Encumbrances, on each Mortgaged Property in favor
of the Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors;
(ii) mortgagee title insurance policies on each Mortgaged Property
issued by title insurers reasonably satisfactory to the Collateral Agent
(the "Mortgage Policies") in amounts reasonably satisfactory to the
Collateral Agent assuring the Collateral Agent that the Mortgages on such
Mortgaged Properties are valid and enforceable first priority mortgage liens
on the respective Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances and such Mortgage Policies shall
otherwise be in form and substance reasonably satisfactory to the Collateral
Agent and shall include, as appropriate, an endorsement for future advances
under this Agreement, the Notes and the Mortgages and for any other matter
that the Collateral Agent in its reasonable discretion may reasonably
request, shall not include an exception for mechanics' liens, and shall
provide for affirmative insurance and such reinsurance (including direct
access agreements) as the Collateral Agent in its reasonable discretion may
reasonably request; and
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(iii) landlord waivers with respect to the Leaseholds of the Borrower
as designated on Schedule III, which landlord waivers shall be in form and
substance reasonably satisfactory to the Administrative Agent.
5.15 Financial Statements; Pro Forma Financial Statements, Projections.
On or prior to the Initial Borrowing Date, the Administrative Agent shall have
received true and correct copies of the historical financial statements, the pro
forma financial statements and the Projections referred to in Sections 7.05(a)
and (d).
5.16 Solvency Opinion; Insurance Certificates. On or prior to the
Initial Borrowing Date, the Administrative Agent shall have received:
(i) a solvency opinion from Houlihan, Lokey, Xxxxxx & Xxxxx Financial
Advisors, Inc., which solvency opinion shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall set forth the conclusions
that, after giving effect to the Transaction and the incurrence of all the
financings contemplated herein, the Borrower is not insolvent, will not be
rendered insolvent by the indebtedness incurred in connection therewith, will
not be left with unreasonably small capital with which to engage in their
business and will not have incurred debts beyond their ability to pay debts as
they mature; and
(ii) certificates of insurance complying with the requirements of
Section 8.03 for the business and properties of the Borrower and its
Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agent and naming the Collateral Agent as an additional insured
and as loss payee, and stating that such insurance shall not be cancelled
without at least 30 days prior written notice by the insurer to the Collateral
Agent (or such shorter period of time as a particular insurance company
generally provides).
5.17 Fees, etc. On the Initial Borrowing Date, the Borrower shall have
paid to the Administrative Agent and each Bank all costs, fees and expenses
(including, without limitation, legal fees and expenses) payable to the
Administrative Agent and each Bank to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation of
each Bank to make Loans (including any Loans made on the Initial Borrowing
Date), and the obligation of the Issuing Bank to issue Letters of Credit
(including any Letters of Credit issued on the Initial Borrowing Date), is
subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
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6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the
making of each Swingline Loan, the Swingline Bank shall have received the notice
referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the Issuing Bank shall have received a Letter of Credit Request
meeting the requirements of Section 2.03.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Banks that all the conditions specified in Section 5 (with respect to
Credit Events on the Initial Borrowing Date) and in this Section 6 (with respect
to Credit Events on or after the Initial Borrowing Date) and applicable to such
Credit Event exist as of that time. All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in this
Section 6, unless otherwise specified, shall be delivered to the Administrative
Agent at the Notice Office for the account of each of the Banks and, except for
the Notes, in sufficient counterparts or copies for each of the Banks and shall
be in form and substance reasonably satisfactory to the Administrative Agent and
the Required Banks.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agreements, in each case after
giving effect to the Transaction, all of which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, and with the occurrence of each other Credit
Event on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct in all material respects on and as of the Initial Borrowing
Date and on the date of each such Credit Event (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
7.01 Corporate Status. Each Credit Party and each of its Subsidiaries
(i) is a duly organized and validly existing corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its organization, (ii) has the requisite corporate, partnership
or limited liability company power and authority, as the case may be, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit Party has the
requisite corporate, partnership or limited liability company power and
authority, as the case may
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be, to execute, deliver and perform the terms and provisions of each of the
Documents to which it is party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such
Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such Documents constitutes its
legal, valid and binding obligation enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the certificate of incorporation or
by-laws (or equivalent organizational documents) of the Borrower or any of its
Subsidiaries.
7.04 Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (a) those
that have otherwise been obtained or made on or prior to the Initial Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date,
(b) those with respect to the Recapitalization the failure to obtain or make
could not, either individually or in the aggregate, reasonably be expected to
have a material adverse effect on the Transaction or on the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole and (c) any novations or
consents that may be required as a result of the Recapitalization in connection
with any of the Borrower's government contracts or subcontracts thereunder), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheets of the
Borrower and its Subsidiaries for the fiscal years ended October 31, 1997 and
October 31, 1998, respectively, and the related consolidated statements of
income, cash flows and shareholders' equity of the Borrower and its Subsidiaries
for the respective fiscal year ended on such dates, copies of which have been
furnished to the Banks prior to the Effective Date, present fairly in all
material respects the consolidated financial position of the Borrower and its
Subsidiaries at the date of such balance sheets and the consolidated results of
the operations of the Borrower and its Subsidiaries for the periods covered
thereby. All of the foregoing historical financial statements have been prepared
in accordance with generally accepted accounting principles consistently applied
except as
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disclosed in the notes thereto. The pro forma consolidated financial statements
of the Borrower and its Subsidiaries as of October 31, 1998 after giving effect
to the Transaction and the financing therefor, copies of which have been
furnished to the Banks prior to the Initial Borrowing Date, present fairly in
all material respects the pro forma consolidated financial position of the
Borrower and its Subsidiaries as of October 31, 1998 and the pro forma
consolidated results of operations of the Borrower and its Subsidiaries for the
twelve month period ended October 31, 1998. After giving effect to the
Transaction (but for this purpose assuming that the Transaction and the related
financing had occurred prior to October 31, 1998), since October 31, 1998,
nothing shall have occurred that has had, or could reasonably be expected to
have, a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date and after giving effect to
the Transaction and to all Indebtedness (including any Loans) being incurred or
assumed and Liens created by the Credit Parties in connection therewith (a) the
sum of the assets, at a fair valuation, of each of the Borrower on a stand-alone
basis and of the Borrower and its Subsidiaries taken as a whole will exceed its
debts; (b) each of the Borrower on a stand-alone basis and the Borrower and its
Subsidiaries taken as a whole has not incurred and does not intend to incur, and
does not believe that it will incur, debts beyond its ability to pay such debts
as such debts mature; and (c) each of the Borrower on a stand alone basis and
the Borrower and its Subsidiaries taken as a whole will have sufficient capital
with which to conduct its business. For purposes of this Section 7.05(b), "debt"
means any liability on a claim, and "claim" means (i) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(c) Except as disclosed in the financial statements delivered pursuant
to Section 7.05(a), there were as of the Initial Borrowing Date no liabilities
or obligations with respect to the Borrower or any of its Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, could reasonably
be expected to be material to the Borrower and its Subsidiaries taken as a
whole. As of the Initial Borrowing Date, the Borrower knows of no basis for the
assertion against it or any of its Subsidiaries of any liability or obligation
of any nature whatsoever that is not disclosed in the financial statements
delivered pursuant to Section 7.05(a) which, either individually or in the
aggregate, could reasonably be expected to be material to the Borrower and its
Subsidiaries taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections delivered
to the Administrative Agent and the Banks prior to the Initial Borrowing Date
have been prepared in good faith and are based on reasonable assumptions, and
there are no statements or conclusions in the Projections which are based upon
or include information known to the Borrower as of the Initial Borrowing Date to
be misleading in any material respect or which fail to take into account
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material information known to the Borrower regarding the matters reported
therein. On the Initial Borrowing Date, the Borrower believes that the
Projections are reasonable, it being recognized by the Banks, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by the Projections may
differ from the projected results and that the differences may be material.
7.06 Litigation. There are no actions, suits or proceedings pending or,
to the best knowledge of the Borrower, threatened (i) with respect to the
Transaction or any Document, (ii) with respect to any material Indebtedness of
the Borrower or any of its Subsidiaries or (iii) that are reasonably likely to
materially and adversely affect the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) (excluding the Projections) furnished by or on behalf of any Credit Party
in writing to the Administrative Agent or any Bank (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) (excluding the Projections) hereafter furnished by or on behalf of
any Credit Party in writing to the Administrative Agent or any Bank will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of Term
Loans shall be utilized solely to finance the Transaction and to pay fees and
expenses relating thereto.
(b) All proceeds of the Revolving Loans and Swingline Loans shall be
used for the working capital and general corporate purposes of the Borrower and
its Subsidiaries and not to finance the Transaction (it being understood,
however, that proceeds of Revolving Loans and Swingline Loans may be incurred
after the Initial Borrowing Date to pay certain fees and expenses incurred after
the consummation of the Transaction and in connection therewith).
(c) No part of any Credit Event (or the proceeds thereof) will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock except to finance the Recapitalization.
Neither the making of any Loan nor the use of the proceeds thereof nor the
occurrence of any other Credit Event will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
7.09 Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal and state income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all federal and state income taxes and all other material taxes and
assessments payable by it which have become due, except for those contested in
good faith and fully provided for on the financial statements of the Borrower
and its Subsidiaries in accordance with generally accepted accounting
principles. The Borrower
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and each of its Subsidiaries have at all times paid, or have provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state and material local and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to date.
There is no material action, suit, proceeding, investigation, audit or claim now
pending or, to the best knowledge of the Borrower threatened, by any authority
regarding any taxes relating to the Borrower or any of its Subsidiaries. As of
the Initial Borrowing Date, neither the Borrower nor any of its Subsidiaries has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of taxes of the Borrower or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Borrower or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.
7.10 Compliance with ERISA. Schedule IV sets forth, as of the Initial
Borrowing Date, each Plan. Each Plan (and each related trust, insurance contract
or fund) is in substantial compliance with its terms and with all applicable
laws, including, without limitation, ERISA and the Code; each Plan (and each
related trust, if any) which is intended to be qualified under Section 401(a) of
the Code has received a determination letter from the Internal Revenue Service
to the effect that it meets the requirements of Sections 401(a) and 501(a) of
the Code or application for such determination has been made; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made except as would not result in any material liability; neither the Borrower
nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred any
material liability (including any indirect, contingent or secondary liability)
to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or expects to incur any such material liability under any of
the foregoing sections with respect to any Plan; no condition exists which
presents a material risk to the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate of incurring a material liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; no proceedings have
been instituted to terminate or appoint a trustee to administer any Plan which
is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, or to
the knowledge of the Borrower and its Subsidiaries, expected or threatened;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and
its Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $50,000; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or former
employees of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
has at all times been operated in material compliance with the
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provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code; no lien imposed under the Code or ERISA on the assets of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and the Borrower and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any material liability.
7.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein to the extent that a security interest
can be created therein under the UCC, and the Collateral Agent, for the benefit
of the Secured Creditors, has a fully perfected first lien on, and security
interest in, all right, title and interest of the Credit Parties in all of the
Security Agreement Collateral described therein (to the extent such security
interest can be perfected by filing a UCC-1 financing statement or, to the
extent required by the Security Agreement, by taking possession of the
respective Security Agreement Collateral), subject to no other Liens other than
Permitted Liens. In addition, the recordation of the Grant of Security Interest
in U.S. Patents and Trademarks in the form attached to the Security Agreement in
the United States Patent and Trademark Office, together with filings on Form
UCC-1 made pursuant to the Security Agreement, will create, as may be perfected
by such filing and recordation, a perfected security interest in the United
States trademarks and patents covered by the Security Agreement and specifically
identified in such Grant and the recordation of the Grant of Security Interest
in U.S. Copyrights in the form attached to the Security Agreement with the
United States Copyright Office, together with filings on Form UCC-1 made
pursuant to the Security Agreement, will create, as may be perfected by such
filing and recordation, a perfected security interest in the United States
copyrights covered by the Security Agreement and specifically identified in such
Grant.
(b) The security interests created in favor of the Collateral Agent, as
pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first priority perfected security interests in the Pledge Agreement
Collateral described therein (other than with respect to certain Pledged
Securities constituting promissory notes to the extent not required to be
delivered pursuant to the Pledge Agreement), subject to no security interests of
any other Person. No filings or recordings are required to perfect (or maintain
the perfection or priority of) the security interests created in the Pledge
Agreement Collateral.
(c) The Mortgages create, as security for the obligations purported to
be secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest and mortgage lien created in
the Mortgaged Properties may be subject to the Permitted Encumbrances related
thereto) and subject to no other Liens (other than Permitted Liens). Schedule
III contains a true and complete list of each parcel of Real Property owned or
leased by the Borrower and its Subsidiaries on the Initial Borrowing Date, and
the type of interest therein held by the Borrower or such Subsidiary. The
Borrower and each of its Subsidiaries have good and marketable title to all
fee-owned Real Property and valid leasehold title to all Leaseholds, in each
case free and clear of all Liens except those described in the first sentence of
this subsection (c).
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7.12 Representations and Warranties in the Documents. Except to the
extent waived by the Required Banks in accordance with Section 5.06(c) or 5.07,
or for such representations and warranties, if any, made by any of the initial
purchasers (in their capacity as such) party to the purchase agreement for the
Senior Subordinated Notes, all representations and warranties set forth in the
other Documents were true and correct in all material respects at the time as of
which such representations and warranties were made (or deemed made) and shall
be true and correct in all material respects as of the Initial Borrowing Date as
if such representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date.
7.13 Properties. The Borrower and each of its Subsidiaries have good
and marketable title to all material properties owned by them, including all
property reflected in the balance sheets referred to in Section 7.05(a) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or as permitted by the terms of this Agreement),
free and clear of all Liens, other than Permitted Liens.
7.14 Capitalization. On the Initial Borrowing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, the
authorized capital stock of the Borrower shall consist of (i) 20,000,000 shares
of common stock, $0.01 par value per share, of which approximately 3,800,000
shares shall be issued and outstanding and (ii) 2,000,000 shares of preferred
stock, $0.01 par value per share, none of which shall be issued and outstanding.
All outstanding shares of capital stock of the Borrower have been duly and
validly issued and are fully paid and non-assessable. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock other than (i) options, rights or warrants that may be issued
from time to time for purchase shares of common stock of the Borrower and (ii)
options, rights or warrants as set forth in the Shareholders' Agreements
delivered pursuant to Section 5.05.
7.15 Subsidiaries. As of the Initial Borrowing Date, the Borrower has
no Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule V
correctly sets forth, as of the Initial Borrowing Date, the percentage ownership
(direct or indirect) of the Borrower in each class of capital stock or other
equity of each of its Subsidiaries and also identifies the direct owner thereof.
7.16 Compliance with Statutes, etc. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
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7.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither the Borrower nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with, and on the date of each Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
knowledge of the Borrower, threatened Environmental Claims against the Borrower
or any of its Subsidiaries (including any such claim arising out of the
ownership, lease or operation by the Borrower or any of its Subsidiaries of any
Real Property no longer owned, leased or operated by the Borrower or any of its
Subsidiaries) or any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries. There are no facts, circumstances, conditions or
occurrences with respect to the business or operations of the Borrower or any of
its Subsidiaries, or any Real Property owned, leased or operated by the Borrower
or any of its Subsidiaries (including any Real Property formerly owned, leased
or operated by the Borrower or any of its Subsidiaries but no longer owned,
leased or operated by the Borrower or any of its Subsidiaries) or, to the
knowledge of the Borrower, any property adjoining or adjacent to any such Real
Property, that could reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Property owned, leased or operated by the Borrower or any of its Subsidiaries or
(ii) to cause any Real Property owned, leased or operated by the Borrower or any
of its Subsidiaries to be subject to any restrictions on the ownership,
occupancy or transferability of such Real Property by the Borrower or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries where such generation,
use, treatment or storage has violated or has given rise to an Environmental
Claim under, or could reasonably be expected to violate or give rise to an
Environmental Claim under, any Environmental Law. Hazardous Materials have not
at any time been Released or disposed of on or from any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries where such Release
or disposal has violated or given rise to an Environmental Claim under, or could
reasonably be expected to violate or give rise to an Environmental Claim under,
any applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 7.19, the
representations and warranties made in this Section 7.19 shall not be untrue
unless the effect of any or all violations, claims, restrictions, failures and
noncompliances of the types described above in this Section 7.19 could
reasonably be expected to, either individually or in the aggregate, have a
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
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7.20 Labor Relations. Neither the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a material adverse effect on the Borrower and its Subsidiaries taken as a
whole. There is (i) no unfair labor practice complaint pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of the Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as could
not reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of the Borrower
and each of its Subsidiaries owns or has the right to use all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to result in a material adverse
effect on the business, operations, property, assets, liabilities or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
7.22 Indebtedness; etc. (a) Schedule VI sets forth a true and complete
list of all Indebtedness (including Contingent Obligations) of the Borrower and
its Subsidiaries as of the Initial Borrowing Date and which is to remain
outstanding after giving effect to the Transaction (excluding the Loans, the
Letters of Credit and the Senior Subordinated Notes, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any Credit Party or any of its
Subsidiaries which directly or indirectly guarantees such debt.
(b) The subordination provisions contained in the Senior Subordinated
Notes and in the other Senior Subordinated Note Documents are enforceable
against the respective Credit Parties party thereto and the holders of the
Senior Subordinated Notes, and all Obligations and Guaranteed Obligations (as
defined in the Subsidiaries Guaranty) are within the definition of "Senior
Indebtedness" or "Guarantor Senior Indebtedness", as the case may be, included
in such subordination provisions.
7.23 Transaction. At the time of consummation thereof, the Transaction
shall have been consummated in all material respects in accordance with the
terms of the applicable Documents and all applicable laws. At the time of
consummation of the Transaction, all third party approvals and all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Transaction will have been obtained, given,
filed or taken and are or
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will be in full force and effect (or effective judicial relief with respect
thereto has been obtained), except for any novations or consents that may be
required as a result of the Recapitalization in connection with any of the
Borrower's government contracts or subcontracts thereunder. All applicable
waiting periods with respect thereto have or, prior to the time when required,
will have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, or imposes material adverse
conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting the Transaction or the performance by
the Borrower or any of its Subsidiaries of their respective obligations under
the Documents. All actions taken by the Borrower or any of its Subsidiaries
pursuant to or in furtherance of the Transaction have been taken in all material
respects in compliance with the Documents and all applicable laws.
7.24 Insurance. Schedule VII sets forth a true and complete listing of
all insurance maintained by the Borrower and its Subsidiaries as of the Initial
Borrowing Date, and with the amounts insured (and any deductibles) set forth
therein.
7.25 Year 2000. All Information Systems and Equipment are either Year
2000 Compliant, or any reprogramming, remediation, or any other corrective
action, including the internal testing of all such Information Systems and
Equipment, will be completed by June 30, 1999. Further, to the extent that such
reprogramming/remediation and testing action is required, the cost thereof, as
well as the cost of the reasonably foreseeable consequences of failure to become
Year 2000 Compliant, to the Borrower and its Subsidiaries (including, without
limitation, reprogramming errors and the failure of other systems or equipment)
will not result in a Default, an Event of Default or a material adverse effect
on the business, operations, property, assets, liabilities or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
agrees that on and after the Effective Date and until the Total Commitment and
all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than indemnities
described in Section 13.13 which are not then due and payable) incurred
hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal month
of the Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal month and the related consolidated
statements of income, shareholders' equity and statement of cash flows for such
fiscal month and for the elapsed portion of the fiscal year ended with the last
day of such fiscal month, in each case setting forth comparative figures for the
corresponding fiscal month in the prior fiscal year and comparable budgeted
figures for such fiscal month, all of which shall be certified by the Chief
Financial Officer of the Borrower, subject to normal year-end audit adjustments
and the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting
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period and the related consolidated statements of income, shareholders' equity
and statement of cash flows for such quarterly accounting period and for the
elapsed portion of the fiscal year ended with the last day of such quarterly
accounting period, in each case setting forth comparative figures for the
related periods in the prior fiscal year, all of which shall be certified by the
Chief Financial Officer of the Borrower, subject to normal year-end audit
adjustments and the absence of footnotes, and (ii) management's discussion and
analysis of the material operational and financial developments during such
quarterly accounting period (it being understood that, to the extent such
management's discussion analysis is included in any report on Form 10-Q that is
filed with the SEC in respect of such quarterly accounting period and such
report is delivered to the Banks pursuant to this Agreement, no separate
management discussion analysis shall be required to be delivered in respect of
such quarterly accounting period).
(c) Annual Financial Statements. Within 90 days after the close of each
fiscal year of the Borrower, (i) the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, shareholders' equity and statement of cash
flows for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified by KPMG Peat Marwick LLP or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Administrative Agent, together with a report of such
accounting firm stating that in the course of its audit of the financial
statements of the Borrower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or an Event of Default relating to
accounting matters which has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and (ii) management's
discussion and analysis of the material operational and financial developments
during such fiscal year (it being understood that, to the extent such
management's discussion and analysis is included in any report on Form 10-K that
is filed with the SEC in respect of such fiscal year and such report is
delivered to the Banks pursuant to this Agreement, no separate management
discussion and analysis shall be required to be delivered in respect of such
fiscal year).
(d) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.
(e) Budgets. No later than 45 days following the first day of each
fiscal year of the Borrower, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income and sources and
uses of cash and balance sheets) prepared by the Borrower (i) for each of the
twelve months of such fiscal year prepared in substantially the same detail as
the Projections and (ii) for each of the immediately three succeeding fiscal
years prepared in summary form, in each case setting forth, with appropriate
discussion, the principal assumptions upon which such budgets are based.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(b) and (c), a certificate of
the Chief Financial Officer of the Borrower to the effect that, to the best of
such officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
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continuing, specifying the nature and extent thereof, which certificate shall
(x) set forth in reasonable detail the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the provisions
of Sections 4.02(d), 4.02(e), 4.02(g) (to the extent delivered with the
financial statements required by Section 8.01(c)), 9.04 and 9.07 through 9.10,
inclusive, at the end of such fiscal quarter or year, as the case may be and (y)
if delivered with the financial statements required by Section 8.01(c), set
forth in reasonable detail the amount of (and the calculations required to
establish the amount of) Excess Cash Flow for the respective Excess Cash Payment
Period.
(g) Notice of Default or Litigation. Promptly upon, and in any event
within five Business Days after, any senior or executive officer of any Credit
Party obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default, (ii) any litigation or
governmental investigation or proceeding pending (x) against the Borrower or any
of its Subsidiaries which could reasonably be expected to materially and
adversely affect the business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole, (y) with respect to any material Indebtedness of the Borrower or any of
its Subsidiaries or (z) with respect to the Transaction or any Document or (iii)
any other event (other than with respect to general economic conditions) which
has had, or could reasonably be expected to have, a material adverse effect on
the business, operations, property, assets, liabilities or condition (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which the Borrower or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders of its material Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(i) Environmental Matters. Promptly after any senior or executive
officer of any Credit Party obtains knowledge thereof, notice of one or more of
the following environmental matters, unless such environmental matters could
not, individually or when aggregated with all other such environmental matters,
be reasonably expected to materially and adversely affect the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries with
any applicable Environmental Law or (b) could reasonably be expected to form
the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
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(iii) any condition or occurrence on any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries that could reasonably be
expected to cause such Real Property to be subject to any restrictions on
the ownership, occupancy, use or transferability by the Borrower or any of
its Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; provided that in any event the Borrower shall deliver
to each Bank all notices received by the Borrower or any of its Subsidiaries
from any government or governmental agency under, or pursuant to, CERCLA
which identify the Borrower or any of its Subsidiaries as potentially
responsible parties for remediation costs or which otherwise notify the
Borrower or any of its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.
(j) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Bank may reasonably request.
8.02 Books, Records, Inspections and Annual Meetings. (a) The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and accounts in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Administrative Agent or
any Bank to visit and inspect, under guidance of officers of the Borrower or
such Subsidiary, any of the properties of the Borrower or such Subsidiary, and
to examine the books of account of the Borrower or such Subsidiary and discuss
the affairs, finances and accounts of the Borrower or such Subsidiary with, and
be advised as to the same by, its and their officers and independent
accountants, all upon reasonable prior notice and at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or such Bank
may reasonably request.
(b) At a date to be mutually agreed upon between the Administrative
Agent and the Borrower occurring on or prior to the 120th day after the close of
each fiscal year of the Borrower, the Borrower will, at the request of the
Administrative Agent, hold a meeting with all of the Banks at which meeting
shall be reviewed the financial results of the Borrower and its Subsidiaries for
the previous fiscal year and the budgets presented for the current fiscal year
of the Borrower.
8.03 Maintenance of Property; Insurance. (a) The Borrower will, and
will cause each of its Subsidiaries to, (i) keep all property necessary to the
business of the Borrower and its Subsidiaries in reasonably good working order
and condition, ordinary wear and tear excepted,
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(ii) maintain insurance on all such property with financially sound and
reputable insurers and in at least such amounts and against at least such risks
as is consistent and in accordance with industry practice for companies
similarly situated owning similar properties, provided that the Borrower and its
Subsidiaries may implement programs of self insurance (other than with respect
to casualty insurance) in the ordinary course of business and in accordance with
the industry standards for similarly situated companies so long as reserves are
maintained in accordance with generally accepted accounting principles for the
liabilities associated therewith and (iii) furnish to the Administrative Agent,
upon written request, full information as to the insurance carried.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
all times keep its property insured in favor of the Collateral Agent, and all
policies (including Mortgage Policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
the Borrower and/or such Subsidiaries) (i) shall name the Collateral Agent as
loss payee as to casualty insurance and as an additional insured in the case of
casualty and liability insurance, (ii) shall state that such insurance policies
shall not be cancelled without at least 30 days' prior written notice thereof by
the respective insurer to the Collateral Agent (or such shorter period of time
as a particular insurance company policy generally provides), (iii) shall
provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured Creditors, (iv)
shall contain the standard non-contributing mortgage clause endorsement in favor
of the Collateral Agent with respect to hazard or liability insurance, (v)
shall, except in the case of public liability insurance, provide that any losses
shall be payable notwithstanding any act of neglect of the Borrower or any of
its Subsidiaries and (vi) shall be deposited with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to insure its
property in accordance with this Section 8.03, or if the Borrower or any of its
Subsidiaries shall fail to so name and deposit all policies or certificates with
respect thereto, the Collateral Agent shall have the right (but shall be under
no obligation), upon 10 days prior notice to the Borrower (although no such
notice shall be required to the extent same is not permitted to be given under
applicable law), to procure such insurance and the Borrower agrees to reimburse
the Collateral Agent for all reasonable costs and expenses of procuring such
insurance.
8.04 Corporate Franchises. The Borrower will, and will cause each of
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
Section 8.04 shall prevent (i) sales of assets and other transactions by the
Borrower or any of its Subsidiaries in accordance with Section 9.02, (ii) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole or (iii) any termination of any such rights, franchises, licenses or
patents that is determined by any senior officer or the Board of Directors of
the Borrower to be in the best interest of the Credit Parties and not otherwise
disadvantageous in any material respect to either the business of the Credit
Parties or the interests of the Banks.
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8.05 Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) The Borrower will comply,
and will cause each of its Subsidiaries to comply, with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter owned,
leased or operated by the Borrower or any of its Subsidiaries, except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, and will promptly pay or cause
to be paid all costs and expenses incurred in connection with such compliance,
and will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws. Neither the Borrower nor any
of its Subsidiaries will generate, use, treat, store, Release or dispose of, or
permit the generation, use, treatment, storage, Release or disposal of Hazardous
Materials on any Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, or transport or permit the transportation
of Hazardous Materials to or from any such Real Property, except for Hazardous
Materials generated, used, treated, stored, Released or disposed of at any such
Real Properties in compliance in all material respects with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of the business or operations of the Borrower or any of its
Subsidiaries.
(b) At any time that any Credit Party gives notice to the Banks
pursuant to Section 8.01(i) or upon the exercise of any of the remedies pursuant
to the last paragraph of Section 10, then at the reasonable written request of
the Administrative Agent or the Required Banks, the Borrower will provide, at
the sole expense of the Borrower, an environmental site assessment report
concerning any Real Property owned, leased or operated by the Borrower or any of
its Subsidiaries, prepared by an environmental consulting firm reasonably
approved by the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in
connection with such Hazardous Materials on such Real Property. If the Borrower
fails to provide the same within 90 days after such request was made, the
Administrative Agent may order the same, the cost of which shall be borne by the
Borrower, and the Borrower shall grant and hereby grant to the Administrative
Agent and the Banks and their agents access to such Real Property and
specifically grants the Administrative Agent and the Banks an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment at any reasonable time upon reasonable notice to the Borrower, all at
the sole and reasonable expense of the Borrower.
8.07 ERISA. As soon as possible and, in any event, within ten (10) days
after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrower
will deliver to each of the Banks a certificate of the Chief Financial Officer
of the Borrower setting forth the full details as to such
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occurrence and the action, if any, that the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, any
Subsidiary, any ERISA Affiliate, the PBGC or any other government agency, or a
Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that the Borrower has
previously delivered to the Banks a certificate and notices (if any) concerning
such event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following 30 days; that an accumulated funding deficiency, within the meaning of
Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be or
have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or
may incur any liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409, 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that the Borrower or any Subsidiary of the
Borrower may incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any Plan. The Borrower will deliver or make available to each
of the Banks (i) a complete copy of the annual report (on Internal Revenue
Service Form 5500-series) of each Plan (including, to the extent required, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed with
the Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of annual reports and
any records, documents or other information required to be furnished to the PBGC
or any other government agency, and any material notices received by the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with respect to
any Plan shall be delivered or made available to the Banks no later than ten
(10) days after the date such annual report has been filed with the Internal
Revenue Service or such records, documents and/or information has been furnished
to the PBGC or any other government agency or such notice has been received by
the Borrower, any Subsidiary or any ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i)
each of its, and each of its Subsidiaries', fiscal years to end on October 31 of
each year and (ii) each of
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its, and each of its Subsidiaries', fiscal quarters to end in a manner
consistent therewith and with current practice, provided, however, that the
Borrower and its Subsidiaries may adopt a fiscal year that ends on December 31
(or such other date as may be approved by the Administrative Agent) of each year
with the prior approval of the Administrative Agent, which approval shall not be
unreasonably withheld, provided further, any Foreign Subsidiary may have (or
from time to time adopt) a fiscal year that ends on any other date without the
prior approval of the Administrative Agent to the extent required to do so by
applicable law or local practice in the jurisdiction in which such Foreign
Subsidiary is organized.
8.09 Performance of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, loan agreement or credit agreement and
each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all federal, state and
other material taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to it,
prior to the date on which penalties attach thereto, and all lawful claims for
sums that have become due and payable which, if unpaid, might become a Lien not
otherwise permitted under Section 9.01(i); provided, that neither the Borrower
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with generally accepted accounting principles.
8.11 Additional Security; Further Assurances. (a) The Borrower will,
and will cause each of its Domestic Subsidiaries (and to the extent Section 8.14
is operative, each of its Foreign Subsidiaries) to, within five days after the
acquisition by the Borrower or any such Subsidiary of any Real Property with a
fair market value (net of the principal amount of any Indebtedness secured by
such Real Property and which is to remain outstanding after the acquisition
thereof) of $2,000,000 or more (each an "Additional Mortgaged Property"), give
notice thereof to the Administrative Agent and thereafter deliver to the
Collateral Agent a mortgage or deed of trust (each, an "Additional Mortgage")
securing the Obligations of the Borrower or such Subsidiary, as the case may be,
in form and substance reasonably satisfactory to the Administrative Agent, each
of which Additional Mortgages shall constitute valid and enforceable mortgages
on the respective Additional Mortgaged Properties subject to no other Liens
except for Permitted Liens. Each Additional Mortgage or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent pursuant to such Additional Mortgage and all
taxes, fees and other charges payable in connection therewith shall have been
paid in full.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such confirmatory or
additional conveyances, financing statements, real
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property surveys and environmental reports on Additional Mortgaged Properties as
the Collateral Agent may reasonably require. Furthermore, the Borrower will
cause to be delivered to the Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by the
Administrative Agent to assure itself that this Section 8.11 has been complied
with.
(c) If the Administrative Agent or the Required Banks reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of any Mortgaged Properties, the Borrower will provide, at
its own expense, to the Administrative Agent appraisals which satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended,
and which otherwise shall be in form and substance reasonably satisfactory to
the Administrative Agent.
(d) The Borrower agrees that each action required above by this Section
8.11 (other than the giving of the notice referred to in clause (a) above) shall
be completed no later than 90 days after such action is either requested to be
taken by the Administrative Agent or required to be taken by the Borrower and/or
its Subsidiaries pursuant to the terms of this Section 8.11; provided that, in
no event will the Borrower or any of its Subsidiaries be required to take any
action, other than using commercially reasonable efforts, to obtain consents
from third parties with respect to its compliance with this Section 8.11.
8.12 Year 2000. The Borrower will ensure that its Information Systems
and Equipment are at all times after June 30, 1999 Year 2000 Compliant, except
insofar as the failure to do so will not result in a material adverse effect on
the business, operations, property, assets, liabilities or condition (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole, and shall
notify the Administrative Agent and each Bank promptly upon detecting any
failure of the Information Systems and Equipment to be Year 2000 Compliant. In
addition, the Borrower shall provide the Administrative Agent and any Bank with
such information about its year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
the Administrative Agent or such Bank shall reasonably request.
8.13 Interest Rate Protection. No later than 90 days following the
Initial Borrowing Date, the Borrower will enter into Interest Rate Protection
Agreements mutually agreeable to the Borrower and the Administrative Agent, with
a term of at least two years, establishing a fixed or maximum interest rate
acceptable to the Administrative Agent for an aggregate amount equal to at least
50% of the aggregate principal amount of all Term Loans then outstanding.
8.14 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Banks deliver
evidence, in form and substance mutually satisfactory to the Administrative
Agent and the Borrower, with respect to any Foreign Subsidiary all of the
capital stock of which has not already been pledged pursuant to the Pledge
Agreement that (i) a pledge of 66-2/3% or more of
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the total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote, (ii) the entering into by such Foreign Subsidiary
of a security agreement in substantially the form of the Security Agreement and
(iii) the entering into by such Foreign Subsidiary of a guaranty in
substantially the form of the Subsidiaries Guaranty, in any such case, could
reasonably be expected to cause (I) any undistributed earnings of such Foreign
Subsidiary as determined for Federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes or (II) other Federal income tax consequences to the Credit
Parties having an adverse effect in any material respect on the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower or any of its Subsidiaries, then in the case of a failure to
deliver the evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock owned by a Credit Party and not
theretofore pledged pursuant to the Pledge Agreement shall be pledged to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary (if same constitutes a Wholly-Owned
Subsidiary) shall execute and deliver the Security Agreement and Pledge
Agreement (or another security agreement or pledge agreement in substantially
similar form, if needed), granting the Secured Creditors a security interest in
all of such Foreign Subsidiary's assets and securing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement and, in the event the Subsidiaries Guaranty
shall have been executed by such Foreign Subsidiary, the obligations of such
Foreign Subsidiary thereunder, and in the case of a failure to deliver the
evidence described in clause (iii) above, such Foreign Subsidiary (if same
constitutes a Wholly-Owned Subsidiary) shall execute and deliver the
Subsidiaries Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Credit Documents
and under any Interest Rate Protection Agreement or Other Hedging Agreement, in
each case, to the extent that the entering into of the Security Agreement, the
Pledge Agreement or the Subsidiaries Guaranty is permitted by the laws of the
respective foreign jurisdiction and with all documents delivered pursuant to
this Section 8.14 to be in form and substance reasonably satisfactory to the
Administrative Agent.
8.15 Moorpark Survey. On or prior to the 90th day after the Initial
Borrowing Date, the Borrower will cause to be delivered to the Collateral Agent
a survey, in form and substance reasonably satisfactory to the Collateral Agent,
of the Moorpark Facility dated a recent date reasonably acceptable to the
Collateral Agent, certified in a manner reasonably satisfactory to the
Collateral Agent by a licensed professional surveyor reasonably satisfactory to
the Collateral Agent.
SECTION 9. Negative Covenants. The Borrower hereby covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder and thereunder, are paid in full:
9.01 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now
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owned or hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to the Borrower
or any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or levies
not yet due or Liens for taxes, assessments or governmental charges or
levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business and (x) which do
not in the aggregate materially detract from the value of the Borrower's or
such Subsidiary's property or assets or materially impair the use thereof in
the operation of the business of the Borrower or such Subsidiary or (y)
which are not yet due or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule VIII, but
only to the respective date, if any, set forth in such Schedule VIII for the
removal, replacement and termination of any such Liens, plus renewals,
replacements, refinancings and extensions of such Liens to the extent set
forth on Schedule VIII, provided that (x) the aggregate principal amount of
the Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement, refinancing
or extension and (y) any such renewal, replacement, refinancing or extension
does not encumber any additional assets or properties of the Borrower or any
of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 9.04(iv), provided that (x) such
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation or any extension, renewal, refinancing or
replacement thereof for the same or a lesser amount to the extent then
permitted by Section 9.04(iv) and (y) the Lien encumbering the asset
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giving rise to the Capitalized Lease Obligation does not encumber any other
asset of the Borrower or any Subsidiary of the Borrower;
(viii) Liens placed upon equipment, machinery and/or Real Property
(including any improvements, accessions, proceeds, products and ancillary
property relating to any of the foregoing property) acquired after the
Initial Borrowing Date and used in the ordinary course of business of the
Borrower or any of its Subsidiaries at the time of the acquisition thereof
by the Borrower or any such Subsidiary or within 90 days thereafter to
secure Indebtedness incurred to pay all or a portion of the purchase price,
construction costs or improvements costs thereof or to secure Indebtedness
incurred solely for the purpose of financing (or, to the extent permitted
above, refinancing) the acquisition, construction or improvement of any such
equipment, machinery and/or Real Property or extensions, renewals,
refinancings or replacements of any of the foregoing for the same or a
lesser amount, provided that (x) the aggregate outstanding principal amount
of all Indebtedness secured by Liens permitted by this clause (viii) shall
not at any time exceed that amount permitted by Section 9.04(iv) and (y) in
all events, the Lien encumbering the equipment, machinery and/or Real
Property so acquired, constructed or improved (and any such related property
(including any such ancillary property)) does not encumber any other asset
of the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions (including building,
zoning and similar restrictions), utility agreements, covenants,
reservations, encroachments and other similar charges or encumbrances, and
minor title deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the Borrower or
any of its Subsidiaries;
(x) Liens arising from precautionary UCC financing statement
filings regarding operating leases or with respect to any inventory held on
consignment in the ordinary course of business;
(xi) Liens arising out of the existence of judgments or awards not
giving rise to an Event of Default under Section 10.09;
(xii) statutory and common law landlords' liens under leases to which
the Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits and Liens securing the
performance of bids, tenders, leases and contracts in the ordinary course of
business, statutory obligations, surety bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money);
(xiv) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (x) any
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Indebtedness that is secured by such Liens is permitted to exist under
Section 9.04(vii) and (y) such Liens are not incurred in connection with, or
in contemplation or anticipation of, such Permitted Acquisition and do not
attach to any other asset of the Borrower or any of its Subsidiaries;
(xv) Liens on the assets of one or more Foreign Subsidiaries which
are granted to secure Indebtedness incurred by such Foreign Subsidiaries
pursuant to, and as permitted by, Section 9.04(xiv);
(xvi) Liens which may be deemed to exist as a result of the
consummation of one or more sale-leaseback transactions effected in
accordance with the requirements of Section 9.02(xviii), (xix) or (xx),
which Liens shall relate only to the assets subject to the respective
sale-leaseback transactions;
(xvii) (A) Liens solely on the real estate portion of the Mesa
Facility securing the Mesa Mortgage Financing incurred pursuant to, and as
permitted by, Section 9.04(xii) and (B) Liens solely on the real estate
portion of the Moorpark Facility securing the Moorpark Mortgage Financing
incurred pursuant to, and as permitted by, Section 9.04(xiii); and
(xviii) other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary that (a) were not
incurred in connection with borrowed money, (b) do not encumber any
Collateral and do not in the aggregate materially detract from the value of
the assets subject thereto or materially impair the use thereof in the
operation of such business and (c) do not secure obligations in excess of
$100,000 in the aggregate for all such Liens.
In connection with the granting of Liens of the type described in clauses (vii),
(viii) and (xvii) of this Section 9.01 by the Borrower or any of its
Subsidiaries, the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate by it in connection therewith
(including, without limitation, by executing appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) all
or any part of the property or assets (other than purchases or other
acquisitions of inventory, materials, supplies and equipment in the ordinary
course of business) of any Person (or agree to do any of the foregoing at any
future time), except that the following transactions (and agreements related
thereto) shall be permitted:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted in accordance with Section 9.07;
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(ii) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(iii) each of the Borrower and its Subsidiaries may sell uneconomic,
obsolete or worn-out equipment, materials or other assets in the ordinary
course of business, provided that the aggregate amount of the proceeds
received from all assets sold pursuant to this clause (iii) shall not exceed
$350,000 in any fiscal year of the Borrower;
(iv) each of the Borrower and its Subsidiaries may sell assets
(other than the capital stock of any Subsidiary Guarantor unless all of the
capital stock of such Subsidiary Guarantor is sold), so long as (v) no
Default or Event of Default then exists or would result therefrom, (w) each
such sale is in an arm's-length transaction and the Borrower or the
respective Subsidiary receives at least fair market value (as determined in
good faith by the Borrower or such Subsidiary, as the case may be), (x) the
total consideration received by the Borrower or such Subsidiary is at least
80% cash, which cash is paid at the time of the closing of such sale,
provided that the amount of any liabilities (as shown on the Borrower's or
such Subsidiary's most recent balance sheet) of the Borrower or any
Subsidiary (other than liabilities that are by their terms subordinated to
the Obligations) that are assumed by the transferee of any such assets shall
be deemed to be cash for purposes of this clause (x), (y) the Net Sale
Proceeds therefrom are applied and/or reinvested as (and to the extent)
required by Section 4.02(d) and (z) the aggregate amount of the proceeds
received from all assets sold pursuant to this clause (iv) (including, for
this purpose, the amount of any assumed liabilities referred to in clause
(x) above) shall not exceed $1,000,000 in any fiscal year of the Borrower;
(v) Investments may be made to the extent permitted by Section
9.05;
(vi) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
9.04(iv));
(vii) each of the Borrower and its Subsidiaries may sell or discount,
in each case without recourse and in the ordinary course of business,
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof and not as part of a
financing transaction;
(viii) the Recapitalization and all payments required to be made by
the Recapitalization Documents (as in effect on the Initial Borrowing Date)
shall be permitted in accordance with the terms of the Recapitalization
Documents;
(ix) each of the Borrower and its Subsidiaries may grant leases or
subleases to other Persons not materially interfering with the conduct of
the business of the Borrower or any of its Subsidiaries;
(x) any Subsidiary of the Borrower (x) may be merged, consolidated
or liquidated with or into the Borrower so long as the Borrower is the
surviving corporation of such merger, consolidation or liquidation and (y)
may transfer all or any portion of its assets to the Borrower;
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(xi) (A) any Subsidiary of the Borrower (x) may be merged,
consolidated or liquidated with or into any other Subsidiary of the Borrower
so long as (i) in the case of any such merger, consolidation or liquidation
involving a Subsidiary Guarantor, the Subsidiary Guarantor is the surviving
corporation of such merger, consolidation or liquidation and (ii) in
addition to the requirements or preceding clause (i), in the case of any
such merger, consolidation or liquidation involving a Wholly-Owned
Subsidiary of the Borrower, the Wholly-Owned Subsidiary is the surviving
corporation of such merger, consolidation or liquidation and (y) may
transfer all or any portion of its assets to any Subsidiary Guarantor and
(B) any Foreign Subsidiary of the Borrower (x) may be merged, consolidated
or liquidated with or into any Wholly-Owned Foreign Subsidiary of the
Borrower so long as the Wholly-Owned Foreign Subsidiary of the Borrower is
the surviving corporation of such merger, consolidation or liquidation and
(y) may transfer all or any portion of its assets to any Wholly-Owned
Foreign Subsidiary of the Borrower;
(xii) each of the Borrower and the Subsidiary Guarantors may acquire
all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any Person)
or 100% of the capital stock of any Person, which Person shall, as a result
of such stock acquisition, become a Wholly-Owned Domestic Subsidiary of the
Borrower (any such acquisition permitted by this clause (xii), a "Permitted
Acquisition"), so long as (i) no Default or Event of Default then exists or
would result therefrom, (ii) each of the representations and warranties
contained in Section 7 shall be true and correct in all material respects
both before and after giving effect to such Permitted Acquisition, (iii) any
Liens or Indebtedness assumed or issued in connection with such acquisition
are otherwise permitted under Section 9.01 or 9.04, as the case may be, (iv)
the only consideration paid by the Borrower or any Subsidiary Guarantor in
connection with any Permitted Acquisition consists solely of cash,
Indebtedness incurred, assumed or issued in accordance with Section 9.04,
common stock of the Borrower and/or Qualified Preferred Stock of the
Borrower, (v) at least 10 Business Days prior to the consummation of any
Permitted Acquisition, the Borrower shall have delivered to the
Administrative Agent and each of the Banks a certificate of the Borrower's
Chief Financial Officer certifying (and showing the calculations therefor in
reasonable detail) that the Borrower and its Subsidiaries would have been in
compliance with the financial covenants set forth in Sections 9.08 through
9.10, inclusive, for the Test Period then most recently ended prior to the
date of the consummation of such Permitted Acquisition, in each case with
such financial covenants to be determined on a pro forma basis as if such
Permitted Acquisition had been consummated on the first day of such Test
Period (and assuming that any Indebtedness incurred, issued or assumed in
connection therewith had been incurred, issued or assumed on the first day
of, and had remained outstanding throughout, such Test Period), (vi) the sum
of the aggregate consideration paid in connection with all Permitted
Acquisitions effected after the Initial Borrowing Date (including, without
limitation, any earn-out, non-compete or deferred compensation arrangements
(in each case as determined in good faith by the Board of Directors of the
Borrower), the aggregate principal amount of any Indebtedness assumed or
issued in connection therewith and the fair market value of any capital
stock of the Borrower issued in connection therewith (as determined in good
faith by the Board of Directors of the Borrower)) does not exceed
$30,000,000, provided that no more than $10,000,000 of Permitted
Acquisitions may be consummated in any fiscal year of the
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Borrower, and (vii) the Total Unutilized Revolving Loan Commitment after
giving effect to any Permitted Acquisition is at least $6,000,000;
(xiii) each of the Borrower and its Subsidiaries may, in the ordinary
course of business, license, as licensor or licensee, patents, trademarks,
copyrights and know-how to third Persons and to one another, so long as any
such license by the Borrower or its Subsidiaries in its capacity as licensor
does not prohibit the granting of a Lien by the Borrower or any of its
Subsidiaries pursuant to the Security Agreement in such license or in the
intellectual property covered thereby;
(xiv) each of the Borrower and its Subsidiaries may sell Cash
Equivalents permitted to be held by them pursuant to Section 9.05(ii) so
long as each such sale is for cash and at fair market value (as determined
in good faith by the Borrower or such Subsidiary, as the case may be);
(xv) each of the Borrower and its Subsidiaries may pay Dividends to
the extent permitted by Section 9.03;
(xvi) Recovery Events shall be permitted;
(xvii) the Borrower may sell the assets used for its glass header
operations located at a leased site in Moorpark, California, so long as (w)
no Default or Event of Default then exists or would result therefrom, (x)
such sale is in an arm's-length transaction and the Borrower receives at
least fair market value (as determined in good faith by the Borrower), (y)
the total consideration received by the Borrower is at least 80% cash, which
cash is paid at the time of the closing of such sale and (z) the Net Sale
Proceeds therefrom are applied and/or reinvested as (and to the extent)
required by Section 4.02(d);
(xviii) the Mesa Sale-Leaseback Transaction shall be permitted, so long
as (u) at the time of the consummation thereof, (A) no Default or Event of
Default then exists or would result therefrom and (B) the Mesa Mortgage
Financing shall not have been theretofore consummated, (v) the Mesa
Sale-Leaseback Transaction is in an arm's-length transaction and the
Borrower receives at least fair market value (as determined in good faith by
the Board of Directors of the Borrower), (w) the total consideration
received by the Borrower is cash and is paid at the time of the closing of
such sale, (x) the aggregate cash proceeds received by the Borrower from
such sale is equal to the greater of (A) $5,000,000 and (B) 75% of the
appraised value of the real estate portion of the Mesa Facility (based on an
appraisal prepared by an independent appraiser reasonably satisfactory to
the Administrative Agent), (y) the Net Sale Proceeds therefrom are applied
as required by Section 4.02(d) and (z) to the extent that such Mesa
Sale-Leaseback Transaction results in a Capitalized Lease Obligation, such
Capitalized Lease Obligations are permitted under Section 9.04(iv);
(xix) the Moorpark Sale-Leaseback Transaction shall be permitted, so
long as (u) at the time of the consummation thereof, (A) no Default or Event
of Default then exists or would result therefrom and (B) the Moorpark
Mortgage Financing shall not have
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been consummated, (v) the Moorpark Sale-Leaseback Transaction is in an
arm's-length transaction and the Borrower receives at least fair market
value (as determined in good faith by the Board of Directors of the
Borrower), (w) the total consideration received by the Borrower is cash and
is paid at the time of the closing of such sale, (x) the aggregate cash
proceeds received by the Borrower from such sale is equal to the greater of
(A) $15,000,000 and (B) 75% of the appraised value of the real estate
portion of the Moorpark Facility (based on an appraisal prepared by an
independent appraiser reasonably satisfactory to the Administrative Agent),
(y) the Net Sale Proceeds therefrom are applied as required by Section
4.02(d) and (z) to the extent that such Moorpark Sale-Leaseback Transaction
results in a Capitalized Lease Obligation, such Capitalized Lease
Obligations are permitted under Section 9.04(iv);
(xx) each of the Borrower and its Subsidiaries may enter into
sale-leaseback transactions with respect to their equipment and Real
Property acquired after the Initial Borrowing Date, so long as (u) no
Default or Event of Default then exists or would result therefrom, (v) each
such sale-leaseback transaction is in an arm's-length transaction and the
Borrower or the respective Subsidiary receives at least fair market value
(as determined in good faith by the Borrower or such Subsidiary, as the case
may be), (w) the total consideration received by the Borrower or such
Subsidiary is cash and is paid at the time of the closing of such sale, (x)
the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the
extent) required by Section 4.02(d), (y) the aggregate amount of proceeds
received from all sale-leaseback transactions pursuant to this clause (xx)
shall not exceed $500,000 in any fiscal year of the Borrower and (z) to the
extent that any such sale-leaseback transaction results in a Capitalized
Lease Obligation, such Capitalized Lease Obligation is permitted under
Section 9.04(iv); and
(xxi) the Borrower may sell approximately 30 acres of excess land
located at the Moorpark Facility so long as (w) no Default or Event of
Default then exists or would result therefrom, (x) such sale is in an
arm's-length transaction and the Borrower receives at least fair market
value (as determined in good faith by the Borrower), (y) the total
consideration received by the Borrower is cash and is paid at the time of
the closing of such sale and (z) the Net Sale Proceeds therefrom are applied
and/or reinvested as (and to the extent) required by Section 4.02(d).
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02 (other than to the Borrower or a Subsidiary thereof), such
Collateral shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate in order to effect the release
of such Collateral from the Liens created by the Security Documents.
9.03 Dividends. The Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) (x) any Subsidiary of the Borrower may pay cash Dividends to
the Borrower or to any Wholly-Owned Subsidiary of the Borrower and (y) any
non-Wholly-
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Owned Subsidiary of the Borrower may pay cash Dividends to its shareholders
or other equity holders generally so long as the Borrower or its respective
Subsidiary which owns the equity interest in the Subsidiary paying such
Dividends receives at least its proportionate share thereof (based upon its
relative holding of the equity interest in the Subsidiary paying such
Dividends and taking into account the relative preferences, if any, of the
various classes of equity interests of such Subsidiary);
(ii) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may repurchase outstanding shares of its
common stock (or options to purchase such common stock) following the death,
disability or termination of employment of directors, officers or employees
of the Borrower or any of its Subsidiaries, provided that the aggregate
amount of Dividends paid by the Borrower pursuant to this clause (ii) in any
fiscal year of the Borrower shall not exceed the sum of (1) $500,000, (2)
the cash proceeds received by the Borrower after the Initial Borrowing Date
from the sale of its common stock or options to purchase such common stock
in each case to directors, officers or employees of the Borrower and its
Subsidiaries that occurs in such fiscal year and (3) amounts referred to in
preceding clauses (1) and (2) that remain unused from the immediately
preceding fiscal year;
(iii) the Borrower may pay dividends on Qualified Preferred Stock of
the Borrower solely through the issuance of additional shares of such
Qualified Preferred Stock of the Borrower in accordance with the terms of
the respective certificate of designation therefor as in effect on the date
of issuance of such Qualified Preferred Stock (it being understood that
nothing in this Section 9.03(iii) shall prevent the Borrower from accruing
(as opposed to declaring and paying) dividends on any Qualified Preferred
Stock in accordance with the terms of the respective certificate of
designation therefor as in effect on the date of issuance of such Qualified
Preferred Stock);
(iv) any Subsidiary of the Borrower may make distributions to the
Borrower or to any Wholly-Owned Subsidiary of the Borrower in connection
with the liquidation of such Subsidiary pursuant to Section 9.02(x) or (xi)
to the extent that such distribution constitutes a Dividend; and
(v) the Recapitalization shall be permitted pursuant to the
Recapitalization Documents (as in effect on the Initial Borrowing Date).
9.04 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Schedule VI, without giving effect to any subsequent
extension, renewal or refinancing thereof except to the extent set forth on
Schedule VI, provided that the aggregate principal amount of the
Indebtedness to be extended, renewed or refinanced
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does not increase from that amount outstanding at the time of any such
extension, renewal or refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 9.04;
(iv) Indebtedness of the Borrower and its Subsidiaries subject to
Liens permitted under Section 9.01(viii) or evidenced by Capitalized Lease
Obligations or any extension, renewal, refinancing or replacement thereof
for the same or a lesser amount, provided that in no event shall the sum of
the aggregate principal amount of all Capitalized Lease Obligations plus the
aggregate principal amount of all Indebtedness secured by Liens permitted by
Section 9.01(viii) (including any such extensions, renewals, refinancings or
replacements of the foregoing) exceed at any time outstanding the sum of (I)
$3,000,000 plus (II) an amount, not to exceed $1,500,000, to the extent that
such amount has been incurred under clause (xiv) of this Section 9.04 plus
(III) an amount, if any, equal to the aggregate principal amount of all
Capitalized Lease Obligations incurred in connection with the Permitted
Sale-Leaseback Transactions under clauses (xviii) and (xix) of Section 9.02;
(v) intercompany Indebtedness among the Borrower and its Subsidiaries
to the extent permitted by Section 9.05(ix);
(vi) Indebtedness of the Borrower and the Subsidiary Guarantors under
the Senior Subordinated Notes and the other Senior Subordinated Note
Documents in an aggregate principal amount not to exceed $100,000,000 (as
reduced by any repayments of principal thereof);
(vii) Indebtedness of a Subsidiary of the Borrower acquired pursuant to
a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted
Acquisition of an asset securing such Indebtedness) or any extension,
renewal, refinancing or replacement thereof for the same or lesser amount,
provided that (x) such Indebtedness was not incurred in connection with, or
in anticipation or contemplation of, such Permitted Acquisition, (y) such
Indebtedness does not constitute debt for borrowed money (other than debt
for borrowed money incurred in connection with industrial revenue or
industrial development or similar bond financings), it being understood and
agreed that Capitalized Lease Obligations and purchase money Indebtedness
shall not constitute debt for borrowed money for purposes of this clause (y)
and (z) at the time of such Permitted Acquisition, such Indebtedness does
not exceed 10% of the total value of the assets of the Subsidiary so
acquired, or of the asset so acquired, as the case may be;
(viii) (A) guaranties by the Borrower and the Subsidiary Guarantors of
each other's Indebtedness and other obligations (in either case, other than
in respect of the Mesa Mortgage Financing or the Moorpark Mortgage
Financing) to the extent that such Indebtedness and other obligations are
otherwise permitted under this Section 9.04 and (B) guaranties by the
Borrower of Indebtedness of Foreign Subsidiaries incurred pursuant to
Section 9.04(xiv);
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(ix) Indebtedness of the Borrower and its Subsidiaries consisting of
any guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets;
(x) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business so long as such
Indebtedness is extinguished within two Business Days of the incurrence
thereof;
(xi) Indebtedness in respect of Other Hedging Agreements to the
extent permitted by Section 9.05(xii);
(xii) Indebtedness of the Borrower in respect of the Mesa Mortgage
Financing so long as (i) at the time of the incurrence thereof, (x) no
Default or Event of Default then exists or would result therefrom and (y)
the Mesa Sale-Leaseback Transaction shall not have been theretofore
consummated, (ii) the aggregate principal amount of such Indebtedness is
equal to the greater of (x) $5,000,000 and (y) 75% of the appraised value
of the real estate portion of the Mesa Facility (based on an appraisal
prepared by an independent appraiser reasonably satisfactory to the
Administrative Agent), (iii) the Net Debt Proceeds therefrom are applied
as required by Section 4.02(c), (iv) the only Liens securing such
Indebtedness are Liens permitted pursuant to Section 9.01(xvii)(A) and (v)
at least 10 Business Days prior to the incurrence of the Mesa Mortgage
Financing, the Borrower shall have delivered to the Administrative Agent
and each of the Banks a certificate of the Borrower's Chief Financial
Officer certifying (and showing the calculations therefor in reasonable
detail) that the Borrower and its Subsidiaries would have been in
compliance with the financial covenants set forth in Sections 9.08 through
9.10, inclusive, for the Test Period then most recently ended prior to the
date of the incurrence of the Mesa Mortgage Financing, in each case with
such financial covenants to be determined on a pro forma basis as if such
Indebtedness had been incurred on the first day of, and had remained
outstanding throughout, such Test Period;
(xiii) Indebtedness of the Borrower in respect of the Moorpark
Mortgage Financing so long as (i) at the time of the incurrence thereof,
(x) no Default or Event of Default then exists or would result therefrom
and (y) the Moorpark Sale-Leaseback Transaction shall not have been
theretofore consummated, (ii) the aggregate principal amount of such
Indebtedness is equal to the greater of (x) $15,000,000 and (y) 75% of the
appraised value of the real estate portion of the Moorpark Facility (based
on an appraisal prepared by an independent appraiser reasonably
satisfactory to the Administrative Agent), (iii) the Net Debt Proceeds
therefrom are applied as required by Section 4.02(c), (iv) the only Liens
securing such Indebtedness are Liens permitted pursuant to Section
9.01(xvii)(B) and (v) at least 10 Business Days prior to the incurrence of
the Moorpark Mortgage Financing, the Borrower shall have delivered to the
Administrative Agent and each of the Banks a certificate of the Borrower's
Chief Financial Officer certifying (and showing the calculations therefor
in reasonable detail) that the Borrower and its Subsidiaries would have
been in compliance with the financial covenants set forth in Sections 9.08
through 9.10, inclusive, for the Test Period then most recently ended
prior
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to the date of the incurrence of the Moorpark Mortgage Financing, in each
case with such financial covenants to be determined on a pro forma basis
as if such Indebtedness had been incurred on the first day of, and had
remained outstanding throughout, such Test Period; and
(xiv) additional Indebtedness incurred by the Borrower and its
Subsidiaries in an aggregate principal amount not to exceed $5,000,000 at
any one time outstanding, of which no more than $1,500,000 may be
outstanding at any time as additional secured Indebtedness under clause
(iv) of this Section 9.04 and with all other Indebtedness incurred under
this clause (xiv) to be unsecured except to the extent permitted under
Section 9.01(xv).
9.05 Advances, Investments and Loans. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may hold the Investments
held by them on the Initial Borrowing Date and described on Schedule IX,
provided that any additional Investments made with respect thereto shall
be permitted only if independently justified under the other provisions of
this Section 9.05;
(iv) the Borrower and its Subsidiaries may acquire and own
Investments (including, without limitation, debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in good faith settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary
course of business;
(v) the Borrower and its Subsidiaries may (A) make loans and
advances in the ordinary course of business to their respective officers
and employees so long as the aggregate principal amount thereof at any
time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $500,000 and (B)
make advances to their employees for moving, relocation and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business so long as any such advances made pursuant to this clause (B)
are ultimately expected to be treated
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as an expense which reduces Consolidated Net Income in accordance with
generally accepted accounting principles;
(vi) the Borrower may acquire and hold obligations of one or more
officers or other employees of the Borrower or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of the Borrower so long as no cash is paid by the Borrower or
any of its Subsidiaries to such officers or employees in connection with
the acquisition of any such obligations;
(vii) the Borrower may enter into Interest Protection Agreements to
the extent permitted by Section 9.04(iii);
(viii) the Borrower and the Subsidiary Guarantors may make cash
common equity contributions to the capital of their respective
Subsidiaries which are Subsidiary Guarantors;
(ix) (A) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another
(collectively, "Intercompany Loans"), so long as no such Intercompany Loan
shall be evidenced by a promissory note or other instrument except an
Intercompany Note that is pledged to the Collateral Agent pursuant to the
Pledge Agreement and (B) Wholly-Owned Foreign Subsidiaries of the Borrower
may make intercompany loans and advances between or among one another;
(x) the Borrower and its Subsidiaries may acquire and hold non-cash
consideration issued by the purchaser of assets in connection with a sale
of such assets to the extent permitted by Sections 9.02(iv) and (xvii);
(xi) Permitted Acquisitions shall be permitted in accordance with
Section 9.02(xii);
(xii) the Borrower and its Subsidiaries may enter into Other Hedging
Agreements in the ordinary course of business providing protection against
fluctuations in currency values in connection with the Borrower's or any
of its Subsidiaries' operations so long as management of the Borrower or
such Subsidiary, as the case may be, has determined in good faith that the
entering into of such Other Hedging Agreements are bona fide hedging
activities and are not for speculative purposes; and
(xiii) the Borrower and its Subsidiaries may make Investments not
otherwise permitted by clauses (i) through (xii) of this Section 9.05 in
an aggregate amount not to exceed $6,000,000.
9.06 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than on terms
and conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted:
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(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered into by
the Borrower and its Subsidiaries to the extent permitted by Sections
9.02, 9.04 and 9.05;
(iii) customary fees may be paid to directors of the Borrower and
its Subsidiaries;
(iv) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may pay regular quarterly management fees
to Xxxxxx and its Affiliates quarterly in advance pursuant to, and in
accordance with, the terms of the Xxxxxx Management Services Agreement (as
in effect on the Initial Borrowing Date);
(v) the Borrower may reimburse Xxxxxx and its Affiliates for their
reasonable out-of-pocket expenses incurred in connection with their
performing management services to the Borrower and its Subsidiaries
pursuant to, and in accordance with, the terms of the Xxxxxx Management
Services Agreement (as in effect on the Initial Borrowing Date);
(vi) the Borrower may pay a transaction fee to Xxxxxx and its
Affiliates on the Initial Borrowing Date in the amount provided for in the
Xxxxxx Management Agreement (as in effect on the Initial Borrowing Date)
plus their reasonable out-of-pocket expenses incurred in connection with
the Transaction;
(vii) the Borrower and its Subsidiaries may enter into, and may make
payments under, employment agreements, employee benefit plans,
indemnification provisions and other similar compensatory arrangements
with officers and directors of the Borrower and its Subsidiaries in the
ordinary course of business;
(viii) the Borrower and the Subsidiary Guarantors may engage in any
transaction among themselves to the extent otherwise expressly permitted
under this Agreement;
(ix) the Borrower and its Subsidiaries may enter into the
Recapitalization Documents and those other agreements listed on Schedule X
(and any amendment or modification thereof otherwise permitted by Section
9.11) and perform their obligations thereunder to the extent such
performance is otherwise permitted under this Agreement; and
(x) the Borrower and its Subsidiaries may purchase parts and
components from Ordnance Products, Inc. and Multi-Screw, Inc. in the
ordinary course of business and consistent with past practice.
9.07 Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(i) during the period from the Initial Borrowing Date through and including the
last day of the Borrower's fiscal year ending October 31, 1999, the Borrower
and its Subsidiaries may make Capital Expenditures in an aggregate amount not
to exceed $6,500,000 and (ii) during any fiscal year of the Borrower set
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forth below (taken as one accounting period), the Borrower and its Subsidiaries
may make Capital Expenditures so long as the aggregate amount of all Capital
Expenditures does not exceed in any fiscal year of the Borrower set forth below
the respective amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
------------------ ------
October 31, 2000 $12,000,000
October 31, 2001 $14,000,000
October 31, 2002 $12,000,000
October 31, 2003 $10,000,000
October 31, 2004 $10,000,000
October 31, 2005 $10,000,000
October 31, 2006 $ 2,000,000
(b) In addition to the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year of the Borrower (before giving
effect to any increase in the permitted Capital Expenditure amount pursuant to
this clause (b)) is greater than the amount of such Capital Expenditures
actually made by the Borrower and its Subsidiaries during such fiscal year, the
lesser of (x) such excess and (y) 50% of the applicable scheduled Capital
Expenditure amount as set forth in such clause (a) above may be carried forward
and utilized to make additional Capital Expenditures in the immediately
succeeding fiscal year, provided that no amounts once carried forward pursuant
to this Section 9.07(b) may be carried forward to any fiscal year thereafter and
such amounts may only be utilized after the Borrower and its Subsidiaries have
utilized in full the permitted Capital Expenditure amount for such fiscal year
as set forth in the table in clause (a) above (without giving effect to any
increase in such amount by operation of this clause (b)).
(c) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures with the amount of Net Sale Proceeds received by
the Borrower or any of its Subsidiaries from any Asset Sale so long as such Net
Sale Proceeds are reinvested in replacement assets within 350 days following the
date of such Asset Sale to the extent such Net Sale Proceeds are not otherwise
required to be applied to repay outstanding Term Loans pursuant to Section
4.02(d) or reduce the Total Revolving Loan Commitment pursuant to Section
3.03(d).
(d) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures with the amount of Net Insurance Proceeds received
by the Borrower or any of its Subsidiaries from any Recovery Event so long as
such Net Insurance Proceeds are used or committed to be used to replace or
restore any properties or assets in respect of which such Net Insurance Proceeds
were paid within one year following the date of receipt of such Net Insurance
Proceeds from such Recovery Event to the extent such Net Insurance Proceeds are
not
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otherwise required to be applied to repay outstanding Term Loans pursuant to
Section 4.02(e) or reduce the Total Revolving Loan Commitment pursuant to
Section 3.03(d).
(e) In addition to the foregoing, the Borrower and the Subsidiary
Guarantors may consummate Permitted Acquisitions to the extent permitted by
Section 9.02(xii).
(f) In addition to the foregoing, the Borrower may make additional
Capital Expenditures to complete the construction of its new facility to be
located in Moorpark, California so long as (i) the aggregate amount of all such
Capital Expenditures made pursuant to this Section 9.07(f) does not exceed
$7,000,000 and (ii) all such Capital Expenditures are made on or before October
31, 1999.
9.08 Consolidated Interest Coverage Ratio. The Borrower will not
permit the Consolidated Interest Coverage Ratio for any Test Period ending on
the last day of a fiscal quarter of the Borrower set forth below to be less than
the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter
Ending Closest To Ratio
----------------- -----
April 30, 1999 1.50:1.00
July 31, 1999 1.75:1.00
October 31, 1999 2.00:1.00
January 31, 2000 2.00:1.00
April 30, 2000 2.00:1.00
July 31, 2000 2.25:1.00
October 31, 2000 2.25:1.00
January 31, 2001 2.25:1.00
April 30, 2001 2.40:1.00
July 31, 2001 2.40:1.00
October 31, 2001
and the last day of each
fiscal quarter thereafter 3.00:1.00
9.09 Maximum Leverage Ratio. The Borrower will not permit the
Leverage Ratio at any time during a period set forth below to be greater than
the ratio set forth opposite such period below:
Period Ratio
------ -----
Initial Borrowing Date through
and including the day immediately
preceding the last day of the
Borrower's fiscal quarter ending
closest to July 31, 1999 5.65:1.00
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The last day of the Borrower's
fiscal quarter ending closest to
July 31, 1999 through and including
the date immediately preceding the
last day of the Borrower's fiscal
quarter ending closest to October
31, 1999 5.50:1.00
The last day of the Borrower's
fiscal quarter ending closest to
October 31, 1999 through and
including the date immediately
preceding the last day of the
Borrower's fiscal quarter ending
closest to January 31, 2000 5.25:1.00
The last day of the Borrower's
fiscal quarter ending closest to
January 31, 2000 through and
including the date immediately
preceding the last day of the
Borrower's fiscal quarter ending
closest to April 30, 2000 4.75:1.00
The last day of the Borrower's
fiscal quarter ending closest to
April 30, 2000 through and
including the date immediately
preceding the last day of the
Borrower's fiscal quarter ending
closest to July 31, 2000 4.50:1.00
The last day of the Borrower's
fiscal quarter ending closest to
July 31, 2000 through and
including the date immediately
preceding the last day of the
Borrower's fiscal quarter
ending closest to October 31, 2000 4.25:1.00
The last day of the Borrower's
fiscal quarter ending closest to
October 31, 2000 through and
including the date immediately
preceding the last day of the
Borrower's fiscal quarter ending
closest to April 30, 2001 4.00:1.00
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The last day of the Borrower's
fiscal quarter ending closest to
April 30, 2001 through and
including the date immediately
preceding the last day of the
Borrower's fiscal quarter ending
closest to October 31, 2001 3.50:1.00
Thereafter 3.00:1.00
9.10 Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA for any Test Period ending on the last day of a fiscal
quarter of the Borrower set forth below to be less than the amount set forth
opposite such fiscal quarter below:
Fiscal Quarter
Ending Closest To Amount
----------------- ------
January 31, 1999 $ 6,100,000
April 30, 1999 $13,300,000
July 31, 1999 $24,100,000
October 31, 1999 $36,500,000
January 31, 2000 $36,500,000
April 30, 2000 $38,000,000
July 31, 2000 $40,000,000
October 31, 2000 $42,000,000
January 31, 2001 $42,000,000
April 30, 2001 $44,000,000
July 31, 2001 $46,000,000
October 31, 2001 $48,000,000
January 31, 2002 $48,000,000
April 30, 2002 $49,000,000
July 31, 2002 $51,000,000
October 31, 2002
and the last day of each
fiscal quarter thereafter $53,000,000
9.11 Limitation on Payments of Certain Indebtedness; Modifications
of Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws
and Certain Other Agreements; etc. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, (i) make (or give any notice in respect of)
any voluntary or optional payment or prepayment on or redemption or acquisition
for value of, or any prepayment or redemption as a result of any asset sale,
change of control or similar event of (including in each case, without
limitation, by way of depositing with the trustee with respect thereto or any
other Person money or securities before due for the purpose of paying when due)
any Senior Subordinated Notes, (ii) amend or modify,
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or permit the amendment or modification of, any provision of the Senior
Subordinated Note Documents, (iii) amend, modify or change its certificate of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or by-laws (or the equivalent organizational
documents) or any agreement entered into by it with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement with
respect to its capital stock, unless such amendment, modification, change or
other action contemplated by this clause (iii) would not violate the terms of
this Agreement and could not reasonably be expected to be adverse to the
interests of the Banks in any material respect (it being understood that, in any
event, the Borrower may issue Qualified Preferred Stock in accordance with the
terms and subject to the conditions set forth in this Agreement) or (iv) amend,
modify or change any provision of (x) the Xxxxxx Management Agreement or the
Xxxxxx Management Services Agreement, in each case other than any amendments,
modifications or changes thereof or terms which could not reasonably be expected
to be adverse to the interests of the Banks in any material respect (it being
understood and agreed, however, that no amendments, modifications or changes may
be made to the monetary terms of the Xxxxxx Management Agreement or the Xxxxxx
Management Services Agreement) or (y) any Tax Sharing Agreement or enter into
any new Tax Sharing Agreement without the prior written consent of the
Administrative Agent in the case of this clause (y).
(b) Neither the Borrower nor any of its Subsidiaries shall designate
any Indebtedness, other than the Obligations, as "Designated Senior
Indebtedness" for purposes of the Senior Subordinated Notes and the other Senior
Subordinated Note Documents.
9.12 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or any Subsidiary
of the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) the Senior Subordinated Note Documents, (iv)
customary provisions restricting subletting or assignment of any lease or
sublease governing a leasehold interest of the Borrower or any Subsidiary of the
Borrower, (v) customary provisions restricting assignment of any licensing
agreement or other contract entered into by the Borrower or any Subsidiary of
the Borrower in the ordinary course of business, (vi) restrictions on the
transfer of any asset subject to a Lien permitted by Sections 9.01(iii), (iv),
(vi), (vii), (viii), (x), (xiii), (xiv), (xv), (xvi) and (xvii) and (vii)
restrictions under any contracts for the sale of (or the granting of an option
to buy) assets, including, without limitation, any restriction with respect to a
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the capital stock or assets of such
Subsidiary, pending the closing of such sale or disposition, provided that any
such restriction relates solely to the assets that are the subject of such
contract (or such option) and such sale (or the granting of such option assuming
same is exercised) is otherwise permitted under Section 9.02. Notwithstanding
the foregoing, Indebtedness incurred by Foreign Subsidiaries of the Borrower
pursuant to, and as permitted by, Section 9.04(xiv) and owing to Persons other
than the Borrower and its Subsidiaries may contain
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restrictions of the type otherwise prohibited in the immediately preceding
sentence, in each case so long as such restrictions are applicable only to the
Foreign Subsidiary or Foreign Subsidiaries incurring such Indebtedness and the
Borrower in good faith determines that said restrictions are not likely to give
rise to a violation of the financial covenants contained in this Agreement and
notifies the Administrative Agent in writing of said restrictions not later than
the last day of the fiscal quarter of the Borrower in which the respective
Indebtedness is incurred or restriction became effective.
9.13 Limitation on Issuance of Capital Stock. (a) The Borrower will
not, and will not permit any of its Subsidiaries to, issue (i) any preferred
stock other than Qualified Preferred Stock of the Borrower or (ii) any
redeemable common stock (other than common stock that is redeemable at the sole
option of the Borrower or such Subsidiary).
(b) The Borrower will not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of the Borrower or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law or (iv) for issuances by newly created or acquired
Subsidiaries in accordance with the terms of this Agreement.
9.14 Business. The Borrower and its Subsidiaries will not engage in
any business other than the businesses engaged in by the Borrower and its
Subsidiaries as of the Initial Borrowing Date and businesses similar, reasonably
related or complementary thereto.
9.15 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Initial Borrowing Date any Subsidiary, provided that (A) the Borrower and
its Wholly-Owned Subsidiaries shall be permitted to establish, create or, to the
extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries so long as
(i) the capital stock or other equity interests of each such new Wholly-Owned
Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates representing such stock or other equity
interests, together with stock or other powers duly executed in blank, are
delivered to the Collateral Agent for the benefit of the Secured Creditors, (ii)
each such new Wholly-Owned Subsidiary (other than a Foreign Subsidiary except to
the extent otherwise required pursuant to Section 8.14) executes and delivers to
the Administrative Agent a counterpart of the Subsidiaries Guaranty, the Pledge
Agreement and the Security Agreement and (iii) each such new Wholly-Owned
Subsidiary (other than a Foreign Subsidiary except to the extent otherwise
required pursuant to Section 8.14) takes all actions required pursuant to
Section 8.11 and (B) the Borrower and its Wholly-Owned Subsidiaries shall be
permitted to establish, create or acquire non-Wholly-Owned Subsidiaries to the
extent permitted by Section 9.05(xiii) so long as the capital stock or other
equity interests of each such new non-Wholly-Owned Subsidiary is pledged
pursuant to, and to the extent required by, the Pledge Agreement and the
certificates representing such stock or other equity interests, together with
stock or other powers duly executed in blank, are delivered to the Collateral
Agent for the benefit of the Secured Creditors. In addition, each new
Wholly-Owned Subsidiary which
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is required to become a Credit Party shall execute and deliver, or cause to be
executed and delivered, to the Administrative Agent all other relevant
documentation of the type described in Sections 5.03, 5.04, 5.05, 5.11, 5.12 and
5.13 as such new Wholly-Owned Subsidiary would have had to deliver if such new
Wholly-Owned Subsidiary were a Credit Party on the Initial Borrowing Date.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any
other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made (or deemed made) by any Credit Party herein or in any other
Credit Document or in any certificate delivered to the Administrative Agent or
any Bank pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.08 or Section 9 or (ii) default in the due performance or observance
by it of any other term, covenant or agreement contained in this Agreement or
any other Credit Document (other than those set forth in Sections 10.01 and
10.02) and such default shall continue unremedied for a period of 30 days after
written notice thereof to the defaulting party by the Administrative Agent or
the Required Banks; or
10.04 Default Under Other Agreements. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity or (ii) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries shall be declared to be
(or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment (or as a result of any sale of an asset
securing such Indebtedness in accordance with the terms thereof), prior to the
stated maturity thereof, provided that it shall not be a Default or an Event of
Default under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) and (ii) is at least
$2,000,000; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the
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petition is not controverted within 10 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Borrower or any of its Subsidiaries, or the Borrower or any of
its Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries, or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or the Borrower or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Borrower or
any of its Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan has not
been timely made, the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate has incurred or is likely to incur any liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account
of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or the Borrower or any
Subsidiary of the Borrower has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, in the reasonable opinion of the Required Banks, has
had, or could reasonably be expected to have, a material adverse effect on the
business, operations, properties, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges
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purported to be created thereby (including, without limitation, to the extent
required thereby, a perfected security interest in, and Lien on, all of the
Collateral (other than an immaterial portion of the Security Agreement
Collateral), in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 9.01), and subject
to no other Liens (except as permitted by Section 9.01); or
10.08 Subsidiaries Guaranty. The Subsidiaries Guaranty or any
provision thereof shall cease to be in full force or effect as to any Subsidiary
Guarantor, or any Subsidiary Guarantor or any Person acting by or on behalf of
such Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's
obligations under the Subsidiaries Guaranty or any Subsidiary Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to the Subsidiaries Guaranty,
provided that if the default constitutes a failure to perform or comply with any
provision, covenant or agreement contained in Section 8 of this Agreement (other
than Section 8.08), such default shall continue unremedied for a period of at
least 30 days after notice to the defaulting Subsidiary Guarantor by the
Administrative Agent or the Required Banks; or
10.09 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments equals or exceeds
$2,000,000 or any order or writ of attachment or similar process shall have been
issued with respect to property of the Borrower or any of its Subsidiaries with
a value of a $2,000,000 or more in the aggregate for the Borrower and its
Subsidiaries; or
10.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Bank or the holder of any Note to enforce its claims against any
Credit Party (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment terminated, whereupon the Commitments of each
Bank shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
the Notes and all Obligations owing hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.05 with respect to the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amount of cash or
Cash Equivalents, to be held as security by the
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Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (vi) apply any cash collateral held by the
Administrative Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquired Entity or Business" shall have the meaning provided in the
definition of Consolidated Net Income.
"Additional Mortgage" shall have the meaning provided in Section
8.11.
"Additional Mortgaged Property" shall have the meaning provided
in Section 8.11.
"Adjusted Consolidated Working Capital" shall mean, at any time,
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Administrative Agent" shall mean BTCo, in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise. Notwithstanding the foregoing, it is
understood and agreed that for purposes of Section 9.06, no Bank (nor any
Affiliate of such Bank) shall be deemed to be an Affiliate of the Borrower.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Base Rate Margin" shall mean, (i) in the case of
Revolving Loans, 1.75% and (ii) in the case of Term Loans, 2.25%.
"Applicable Commitment Commission Percentage" shall mean 0.50%.
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"Applicable Eurodollar Rate Margin" shall mean, (i) in the case of
Revolving Loans, 2.75% and (ii) in the case of Term Loans, 3.25%.
"Applicable Excess Cash Flow Percentage" shall mean 75%, provided
that so long as (i) no Default or Event of Default exists on the respective
Excess Cash Payment Date and (ii) the Leverage Ratio as of the last day of the
respective Excess Cash Payment Period is 3.00:1.00 or less, then the foregoing
percentage instead shall be 50%.
"Asset Sale" shall mean any sale, transfer or other disposition by
the Borrower or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower of any asset (including, without limitation, any
capital stock or other securities of, or equity interests in, another Person)
other than sales of assets pursuant to Sections 9.02 (ii), (iii), (vii), (viii),
(ix), (x), (xi), (xiii), (xiv), (xv) and (xvi).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Bank" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Bank" hereunder pursuant to Section 1.13
or 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Bank having notified in
writing the Borrower and/or the Administrative Agent that such Bank does not
intend to comply with its obligations under Section 1.01(a), 1.01(b), 1.01(d) or
2.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" shall mean, at any time, the higher of (i) the Prime
Lending Rate and (ii) -1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each
other Loan designated or deemed designated as such by the Borrower at the time
of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments of the respective Tranche (or from
the Swingline Bank in the case of Swingline Loans) on a given date (or resulting
from a conversion or conversions on such date) having in the case of Eurodollar
Loans the same Interest Period, provided that Base Rate Loans incurred pursuant
to Section 1.10(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
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"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City, New York, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) above and which is also a day for
trading by and between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any
Person, all rental obligations of such Person which, under generally accepted
accounting principles, are or will be required to be capitalized on the books of
such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) marketable direct obligations
issued by any state of the United States or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either Standard & Poor's Ratings
Services ("S&P") or Xxxxx'x Investors Service, Inc. ("Moody's"), (iii)
commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 from
S&P or at least P-1 from Moody's, (iv) certificates of deposit, Euro-dollar
deposits or bankers' acceptance maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States or any state thereof or the District of Columbia or any U.S. branch of a
foreign bank or any foreign branch of a U.S. bank, in each case having at the
date of acquisition thereof combined capital and surplus of not less than
$250,000,000, (v) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv) above and
(vi) investments in money market funds with assets at least equal to
$500,000,000.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) Xxxxxx, JFL Equity, JFL
Co-Invest, Paribas and their respective Affiliates shall cease to own,
collectively, on a fully diluted basis in the aggregate at least 51% of the
economic and voting interest in the Borrower's capital stock or (ii) a "change
of control" or similar event shall occur under, and as defined in, the Senior
Subordinated Note Documents or any issue of Qualified Preferred Stock.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, the Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.05.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of the Borrower and its Subsidiaries at such time.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of the Borrower and its Subsidiaries at such
time, but excluding the current portion of any Indebtedness under this Agreement
and the current portion of any other long-term Indebtedness which would
otherwise be included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income for such period before consolidated interest expense of the Borrower and
its Subsidiaries and provision for taxes for such period.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by (x) adding thereto (i) the amount of all
amortization, depreciation and other non-cash expenses or non-cash charges that
were deducted in arriving at Consolidated EBIT for such period (including
amortization of goodwill, the non-cash costs of agreements evidencing Interest
Rate Protection Agreements, Other Hedging Agreements, license agreements and
non-competition agreements, and the non-cash amortization of Capitalized Lease
Obligations, management fees and organization costs), but excluding, however,
any non-cash expenses or non-cash charges associated with any asset write-downs
and (ii) unrealized non-cash gains and losses from hedging, foreign currency or
commodities translations and transactions that were deducted in arriving at
Consolidated EBIT for such period and (y) subtracting therefrom any cash
expenses, cash charges or cash payments arising from any non-cash expenses,
non-cash charges or unrealized non-cash gains or losses that were deducted in
arriving at Consolidated EBIT in a previous period.
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"Consolidated Indebtedness" shall mean, at any time, the principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such time
determined on a consolidated basis to the extent that such Indebtedness would be
accounted for as debt on the liability side of a balance sheet in accordance
with generally accepted accounting principles plus, without duplication, (i) the
maximum amount available to be drawn under all letters of credit (including any
Letters of Credit), bankers acceptances and similar obligations issued for the
account of the Borrower and its Subsidiaries and all unpaid drawings or
reimbursement obligations in respect thereof, (ii) the principal amount of all
bonds issued by the Borrower and its Subsidiaries in connection with workers'
compensation obligations, lease obligations, surety and similar obligations and
(iii) the amount of all Contingent Obligations of the Borrower and its
Subsidiaries determined on a consolidated basis in respect of Indebtedness of
other Persons of the type described above in this definition.
"Consolidated Interest Coverage Ratio" shall mean, for any period,
the ratio of (x) Consolidated EBITDA for such period to (y) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the sum
of (i) the total consolidated interest expense of the Borrower and its
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period plus (ii) the product of (A) the amount of all cash
dividend payments made on any class of Qualified Preferred Stock during such
period and (B) a fraction, the numerator of which is one and the denominator of
which is one minus the current effective consolidated federal, state and local
income tax rate of the Borrower expressed as a decimal, provided that (x) the
amortization or write-off of debt issuance costs, commissions, fees and expenses
and (y) the amortization of original issue discount shall (in each case) be
excluded from Consolidated Interest Expense to the extent same would otherwise
have been included therein.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
in determining Consolidated Net Income, (i) the net income of any other Person
which is not a Subsidiary of the Borrower or is accounted for by the Borrower by
the equity method of accounting shall be included only to the extent of the
payment of cash dividends or distributions by such other Person to the Borrower
or a Subsidiary thereof during such period, (ii) the net income (or loss) of any
other Person acquired by such specified Person or a Subsidiary of such Person in
a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iii) gains or losses from Asset Sales or other
sales of assets (in each case) outside the ordinary course of business or
abandonment or reserves relating thereto shall be excluded, (iv) items
classified as extraordinary gains or extraordinary losses shall be excluded, (v)
the net income of any Subsidiary of the Borrower shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of its income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument or law applicable to such Subsidiary
and (vi) the fees, expenses and other costs incurred in connection with the
Recapitalization in such period shall be excluded; provided that for purposes of
Section 9.09, there shall be included (to the extent not already included) in
determining Consolidated Net Income for any period the net income (or loss) of
any Person, business, property or asset acquired during such period pursuant
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to a Permitted Acquisition and not subsequently sold or otherwise disposed of by
the Borrower or one of its Subsidiaries during such period (each such Person,
business, property or asset acquired and not subsequently disposed of during
such period, an "Acquired Entity or Business"), in each case based on the actual
net income (or loss) of such Acquired Entity or Business for the entire period
(including the portion thereof occurring prior to such acquisition); provided
further, however, that Consolidated Net Income shall be deemed to include any
increase during such period to consolidated shareholder's equity of the Borrower
attributable to tax benefits from net operating losses and the exercise of stock
options that are not otherwise included in Consolidated Net Income for such
period.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the lesser of (x) stated or determinable amount
of the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith and (y) the stated amount of such
Contingent Obligation.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean the making of any Loan or the issuance
of any Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
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"Dividend" shall mean, with respect to any Person, that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or other equity holders or authorized or made any other
distribution, payment or delivery of property (other than common stock or
comparable common equity interest of such Person) or cash to its stockholders or
other equity holders in their capacity as stockholders or as other equity
holders, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock or
any other equity interests outstanding on or after the Initial Borrowing Date
(or any options or warrants issued by such Person with respect to its capital
stock or other equity interests), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for a consideration any shares of any class of the capital
stock or any other equity interests of such Person outstanding on or after the
Initial Borrowing Date (or any options or warrants issued by such Person with
respect to its capital stock or other equity interests). Without limiting the
foregoing, "Dividends" with respect to any Person shall also include all cash
payments made or required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any similar
plans or setting aside of any funds for the foregoing purposes.
"Documents" shall mean and include (i) the Credit Documents, (ii)
the Recapitalization Documents, (iii) the Equity Financing Documents and (iv)
the Senior Subordinated Note Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in loans or any other entity which
is a "qualified institutional buyer" or an "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act).
"Employment Agreements" shall have the meaning provided in
Section 5.05.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
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"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. Section 1801 et seq. and the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"Equity Financing" shall mean the issuance by the Borrower of (i)
shares of its common stock to JFL Equity, JFL Co-Invest and certain other
investors previously identified to the Administrative Agent and (ii) the
rollover by certain shareholders of the Borrower of their common stock of the
Borrower, in each case pursuant to the Equity Financing Documents and as part of
the Transaction.
"Equity Financing Documents" shall mean each of the documents and
agreements entered into in connection with the consummation of the Equity
Financing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan (other than a Swingline Loan)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 11:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period, divided (and
rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any
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member bank of the Federal Reserve System in respect of Eurocurrency funding or
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Consolidated Net Income for such period, (ii) to the extent
deducted in determining Consolidated Net Income for such period, (A)
depreciation and amortization, (B) deferred taxes and (C) other non-cash charges
(exclusive of items reflected in Adjusted Consolidated Working Capital) and
(iii) the decrease, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period, minus, without duplication, (b) the
sum of (i) the amount of all Capital Expenditures made by the Borrower and its
Subsidiaries during such period (other than Capital Expenditures to the extent
financed with Asset Sale proceeds, equity proceeds, insurance proceeds or
Indebtedness, (ii) the aggregate amount of permanent principal payments of
Indebtedness for borrowed money of the Borrower and its Subsidiaries during such
period (other than (I) repayments to the extent financed with Asset Sale
proceeds, equity proceeds, insurance proceeds or Indebtedness and (II)
repayments of Loans, provided that repayments of Loans shall be deducted in
determining Excess Cash Flow if such repayments were (x) required as a result of
a Scheduled Repayment under Section 4.02(b) or (y) made as a voluntary
prepayment with internally generated funds (but in the case of a voluntary
prepayment of Revolving Loans or Swingline Loans, only to the extent accompanied
by a voluntary reduction to the Total Revolving Loan Commitment)), (iii) the
increase, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, (iv) to the extent included in determining
Consolidated Net Income for such period, non-cash gains (exclusive of items
reflected in Adjusted Consolidated Working Capital) during such period, (v) the
amount of cash actually paid by the Borrower or its Subsidiaries in connection
with losses or costs referred to in clauses (iii), (iv) and (vi) of the
definition of "Consolidated Net Income" during such period and (vii) the amount
of all cash expenditures paid in connection with Permitted Acquisitions
consummated during such period (other than expenditures to the extent financed
with equity proceeds (including capital contributions), Asset Sale proceeds or
Indebtedness).
"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of the Borrower (beginning with its
fiscal year ending October 31, 1999).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower (or, in the case of the Borrower's fiscal year
ending October 31, 1999, the period from the Initial Borrowing Date through and
including October 31, 1999).
"Existing Indebtedness" shall have the meaning provided in
Section 7.22.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.05.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds
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transactions with members of the Federal Reserve System arranged by Federal
Funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized standing
selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to
in Section 3.01.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower
other than a Domestic Subsidiary.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (ii) the maximum amount available to be
drawn under all letters of credit issued for the account of such Person and all
unpaid drawings in respect of such letters of credit, (iii) all Indebtedness of
the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person (provided, that, if the
Person has not assumed or otherwise become liable in respect of such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the
fair market value of the property to which such Lien relates as determined in
good faith by such Person), (iv) the aggregate amount required to be capitalized
under leases under which such Person is the lessee, (v) all obligations of such
person to pay a specified purchase price for goods or services, whether or not
delivered or accepted, i.e., take-or-pay and similar obligations, (vi) all
Contingent Obligations of such Person and (vii) all obligations under any
Interest Rate Protection Agreement, any Other Hedging Agreement or under any
similar type of agreement. Notwithstanding the foregoing, Indebtedness shall not
include trade payables and accrued expenses incurred by any Person in accordance
with customary practices and in the ordinary course of business of such Person.
"Indebtedness to be Refinanced" shall mean all Indebtedness set
forth on Schedule XI.
"Information Systems and Equipment" shall mean all computer
hardware, firmware and software, as well as other information processing
systems, or any equipment containing embedded microchips, whether directly
owned, licensed, leased, operated or otherwise controlled by the Borrower or any
of its Subsidiaries, including through third-party
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service providers, and which, in whole or in part, are used, operated, relied
upon, or integral to, the Borrower's or any of its Subsidiaries' conduct of
their business.
"Initial Borrowing Date" shall mean that date on or after the
Effective Date on which the Initial Borrowing of Loans occurs hereunder.
"Intercompany Loan" shall have the meaning provided in Section
9.05(ix).
"Intercompany Note" shall mean a promissory note, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo.
"JFL Co-Invest" shall mean JFL Co-Invest Partners I, L.P., a
Delaware limited partnership and an Affiliate of Xxxxxx.
"JFL Equity" shall mean X.X. Xxxxxx Equity Investors I, L.P., a
Delaware limited partnership and an Affiliate of Xxxxxx.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or any of its Subsidiaries with respect to workers compensation, surety
bonds and other similar statutory obligations, (ii) obligations that may be
classified as "accounts payable" in accordance with generally accepted
accounting principles and (iii) such other obligations of the Borrower or any of
its Subsidiaries as are reasonably acceptable to the Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Xxxxxx" shall mean X.X. Xxxxxx & Company, Inc., a private
investment firm.
"Xxxxxx Management Agreement" shall mean the Management Agreement,
dated as of December 15, 1998, by and between the Borrower and Xxxxxx.
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"Xxxxxx Management Services Agreement" shall mean the Management
Services Agreement, dated as of December 15, 1998, by and between the Borrower
and Xxxxxx.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the Test Period then most
recently ended; it being agreed that Consolidated EBITDA for the Borrower's
fiscal quarters ended February 1, 1998, May 3, 1998, August 2, 1998 and October
31, 1998, was $7,448,000, $8,990,000, $9,438,000 and $8,550,000, respectively.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan and each
Swingline Loan.
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(d).
"Margin Stock" shall have the meaning provided in Regulation U.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Term Loan Maturity Date, the Revolving Loan Maturity Date or the
Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $1,000,000.
"Mergeco" shall mean SDI Acquisition Corp., a Delaware
corporation.
"Mesa Facility" shall mean the Borrower's manufacturing facility
currently located in Mesa, Arizona.
"Mesa Mortgage Financing" shall mean the mortgage financing incurred
by the Borrower pursuant to Section 9.04(xii), which mortgage financing may only
be secured as
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provided in Section 9.01(xvii)(A), so long as the structure, terms, conditions
and documentation of such transaction are in form and substance reasonably
satisfactory to the Administrative Agent.
"Mesa Sale-Leaseback Transaction" shall mean the sale and leaseback
by the Borrower of the Real Property located in Mesa, Arizona owned by it on the
Initial Borrowing Date, so long as the structure, terms, conditions and
documentation of such transaction are in form and substance reasonably
satisfactory to the Administrative Agent.
"Minimum Borrowing Amount" shall mean (i) for Term Loans,
$1,000,000, (ii) for Revolving Loans, $500,000 and (iii) for Swingline Loans,
$100,000.
"Xxxxx'x" shall have the meaning provided in the definition of
"Cash Equivalents".
"Moorpark Facility" shall mean the Borrower's new manufacturing
facility to be located in Moorpark, California.
"Moorpark Mortgage Financing" shall mean the mortgage financing
incurred by the Borrower pursuant to Section 9.04(xiii), which mortgage
financing may only be secured as provided in Section 9.01(xvii)(B), so long as
the structure, terms, conditions and documentation of such transaction are in
form and substance reasonably satisfactory to the Administrative Agent.
"Moorpark Sale-Leaseback Transaction" shall mean the sale and
leaseback by the Borrower of the Real Property located in Moorpark, California
owned by it on the Initial Borrowing Date, so long as the structure, terms,
conditions and documentation of such transaction are in form and substance
reasonably satisfactory to the Administrative Agent.
"Mortgages" shall have the meaning provided in Section 5.14 and,
after the execution and delivery thereof, shall include each Additional
Mortgage.
"Mortgage Policies" shall have the meaning provided for in
Section 5.14.
"Mortgaged Properties" shall have the meaning provided in Section
5.14 and, after the execution and delivery of any Additional Mortgage, shall
include the respective Additional Mortgaged Property.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
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"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents) which is secured by the
respective assets which were sold), and the incremental taxes paid or payable as
a result of such Asset Sale and any reasonable reserves established in
connection therewith as determined in good faith by the Borrower.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.05.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Term Note, each Revolving Note and the
Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx Xxxxxxx or such other office as the Administrative
Agent may hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or such other office as the Administrative Agent may hereafter designate
in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall have the meaning provided in
Section 9.02(xii).
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the mortgage policy
delivered with respect thereto, all
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of which exceptions must be reasonably acceptable to the Administrative Agent in
its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Permitted Sale-Leaseback Transactions" shall mean, collectively,
the Mesa Sale-Leaseback Transaction and the Moorpark Sale-Leaseback
Transaction.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.11.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Projections" shall mean the projections prepared by (or on behalf
of) the Borrower in connection with the Transaction, dated September, 1998 (as
supplemented on October 9, 1998) and furnished to the Banks prior to the Initial
Borrowing Date.
"Qualified Preferred Stock" shall mean any class of preferred stock
of the Borrower so long as the terms of any such preferred stock (i) do not
contain any mandatory put, redemption, repayment, sinking fund or other similar
provision occurring before December 15, 2006, (ii) do not require the cash
payment of dividends to the extent that same would not otherwise be permitted
under this Agreement, (iii) do not contain any operating or financial
maintenance covenants or any other covenants that could, in the reasonable
opinion of the Administrative Agent, adversely affect the interests of the Banks
or (iv) do not grant the holders thereof any voting rights except for (x) voting
rights required to be granted to such holders under applicable law and (y)
limited customary voting rights on fundamental matters such as mergers,
consolidations, sales of all or substantially all of the assets of the Borrower,
or liquidations
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involving the Borrower and (v) are otherwise reasonably satisfactory to the
Administrative Agent.
"Quarterly Payment Date" shall mean each October 31, January 31,
April 30 and July 31 occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recapitalization" shall mean the merger of Mergeco with and into
the Borrower, with the Borrower as the surviving corporation of such merger,
pursuant to the Recapitalization Documents.
"Recapitalization Documents" shall mean and include (i) the Amended
and Restated Agreement and Plan of Merger, dated as of June 19, 1998, between
Mergeco and the Borrower, as the same as may be amended, modified or
supplemented from time to time pursuant to the terms hereof and thereof and (ii)
all other agreements and documents, governing, or relating to, the
Recapitalization.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards payable
(i) by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
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"Replacement Assets" shall have the meaning provided in Section
4.02(d).
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and RL Percentages of outstanding Swingline
Loans and Letter of Credit Outstandings) represent an amount equal to at least
50.1% of the sum of all outstanding Term Loans of Non-Defaulting Banks and the
Total Revolving Loan Commitment less the Revolving Loan Commitments of all
Defaulting Banks (or after the termination thereof, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Banks and the aggregate RL
Percentages of all Non-Defaulting Banks of the total outstanding Swingline Loans
and Letter of Credit Outstandings Swingline Loans at such time).
"Revolving Loan" shall have the meaning provided in Section
1.01(b).
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time
as a result of assignments to or from such Bank pursuant to Section 1.13 or
13.04(b).
"Revolving Loan Maturity Date" shall mean December 15, 2003.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RL Bank" shall mean each Bank with a Revolving Loan Commitment or
with outstanding Revolving Loans.
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"S&P" shall have the meaning provided in the definition of "Cash
Equivalents".
"Scheduled Repayment" shall have the meaning provided in Section
4.02(b).
"SEC" shall have the meaning provided in Section 8.01(h).
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"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section
5.12.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Document" shall mean and include each of the Security
Agreement, the Pledge Agreement, each Mortgage and, after the execution and
delivery thereof, each Additional Mortgage.
"Senior Subordinated Note Documents" shall mean the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and each other
document or agreement relating to the issuance of the Senior Subordinated Notes.
"Senior Subordinated Note Indenture" shall mean the Indenture, dated
as of December 15, 1998, among the Borrower, the Guarantors named therein and
U.S. Trust Company of New York, as trustee, as in effect on the Initial
Borrowing Date.
"Senior Subordinated Note Offering Memorandum" shall mean the
Offering Memorandum, dated December 11, 1998, prepared in connection with the
issuance of the Senior Subordinated Notes.
"Senior Subordinated Notes" shall mean the Borrower's 11 3/8%
Senior Subordinated Notes due 2008.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Stated Amount" of each Letter of Credit shall mean, at any time,
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.13.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a
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majority of the directors of such corporation (irrespective of whether or not at
the time stock of any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
owned by such Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person has
more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of the
Borrower and, to the extent provided in Section 8.14, each Foreign Subsidiary of
the Borrower.
"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement, if
(x) all outstanding Obligations in respect of the Revolving Loan Commitments
were repaid in full and the Total Revolving Loan Commitment were terminated and
(y) the percentage "50.1%" contained therein were changed to "66-2/3%".
"Swingline Bank" shall mean BTCo.
"Swingline Expiry Date" shall mean that date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(c).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I directly below the column entitled
"Term Loan Commitment," as same may be terminated pursuant to Sections 3.03
and/or 10.
"Term Loan Maturity Date" shall mean December 15, 2005.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters of the Borrower then last ended (in each case taken as one accounting
period), provided, however, for purposes of determining compliance with Sections
9.08 and 9.10 for any Test Period ending on or prior to the Borrower's fiscal
year ending October 31, 1999, each such Test Period shall mean the period from
the Initial Borrowing Date to the last day of the fiscal quarter of the Borrower
then last ended (in each case taken as one accounting period).
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"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less (y) the sum of the aggregate principal amount of
all Revolving Loans and Swingline Loans then outstanding plus the then aggregate
amount of all Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being three separate Tranches,
i.e., Term Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation of the
Recapitalization and the other transactions contemplated by the Recapitalization
Documents, (ii) the issuance of the Senior Subordinated Notes, (iii) the
consummation of the Equity Financing, (iv) the refinancing of the Indebtedness
to be Refinanced, (v) the entering into of the Credit Documents and (vi) the
payment of fees and expenses in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan, determined on a plan termination basis in accordance with actuarial
assumptions at such time consistent with those prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds the market value of the assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with respect to
any Bank at any time, such Bank's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Bank at such time and (ii) such Bank's RL Percentage of the Letter
of Credit Outstandings at such time.
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"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Year 2000 Compliant" shall mean that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing), before, during and after the year 2000,
as well as same and multi-century dates, or between the years 1999 and 2000,
taking into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing with,
other Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function in
the same manner as it performs on the Initial Borrowing Date and shall not
otherwise impair the accuracy or functionality of Information Systems and
Equipment.
SECTION 12. The Administrative Agent.
12.01 Appointment. The Banks hereby irrevocably designate BTCo as
Administrative Agent (for purposes of this Section 12, the term "Administrative
Agent" also shall include BTCo in its capacity as Collateral Agent pursuant to
the Security Documents) to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on their behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its officers, directors,
agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative Agent nor any of
its officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any other Credit Document or
in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Administrative Agent shall
be mechanical and administrative in nature; the Administrative Agent shall not
have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank or the holder of any Note; and nothing in
this Agreement or any other Credit Document, expressed
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or implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Bank by reason of
so refraining. Without limiting the foregoing, no Bank or the holder of any Note
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Banks.
12.05 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Credit Parties, the Banks will reimburse and
indemnify the Administrative Agent in proportion to their respective
"percentage" as used in determining the Required Banks (determined as if there
were no Defaulting Banks) for and against any and all
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liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its duties hereunder or under any other Credit Document or in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the Administrative
Agent's gross negligence or willful misconduct (as finally determined by a court
of competent jurisdiction).
12.07 The Administrative Agent in its Individual Capacity. With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Administrative Agent shall have the rights and
powers specified herein for a "Bank" and may exercise the same rights and powers
as though it were not performing the duties specified herein; and the term
"Banks," "Required Banks," "Supermajority Banks," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its respective individual capacities. The Administrative
Agent and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, investment banking, trust or other business with,
or provide debt financing, equity capital or other services (including financial
advisory services) to, any Credit Party or any Affiliate of any Credit Party (or
any Person engaged in a similar business with any Credit Party or any Affiliate
thereof) as if they were not performing the duties specified herein, and may
accept fees and other consideration from any Credit Party or any Affiliate of
any Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Banks.
12.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Borrower and the
Banks. Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation by the Administrative Agent,
the Required Banks shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor
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Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Required Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and of the
Administrative Agent's local counsel and consultants) in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent in connection with its syndication efforts with respect to
this Agreement and of the Administrative Agent and, after the occurrence and
during the continuance of an Event of Default, each of the Banks in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings (including, without limitation, in each case the
reasonable fees and disbursements of counsel for the Administrative Agent and,
after the occurrence and during the continuance of an Event of Default, for each
of the Banks); (ii) pay and hold each of the Banks harmless from and against any
and all present and future stamp, excise and other similar documentary taxes
with respect to the foregoing matters and save each of the Banks harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Bank) to pay such
taxes; and (iii) indemnify the Administrative Agent and each Bank, and each of
their respective officers, directors, trustees, employees, representatives and
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not the Administrative Agent or any Bank is a party
thereto and whether or not such investigation, litigation or other proceeding is
brought by or on behalf of any Credit Party) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
the Transaction or any other transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or on the surface
or subsurface of any Real Property owned, leased or at any time
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operated by the Borrower or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower or
any of its Subsidiaries at any location, whether or not owned, leased or
operated by the Borrower or any of its Subsidiaries, the non-compliance of any
Real Property with any Environmental Law (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against the Borrower, any of its Subsidiaries or any Real Property owned, leased
or at any time operated by the Borrower or any of its Subsidiaries, including,
in each case, without limitation, the reasonable fees and disbursements of
counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding (but excluding, in each case, any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified (as finally determined by a court of competent jurisdiction). To the
extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent or any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. (a) In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent and each Bank is hereby authorized
at any time or from time to time, without presentment, demand, protest or other
notice of any kind to any Credit Party or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held or
owing by the Administrative Agent or such Bank (including, without limitation,
by branches and agencies of such Bank wherever located) to or for the credit or
the account of any Credit Party against and on account of the Obligations and
liabilities of the Credit Parties to the Administrative Agent or such Bank under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 13.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not the Administrative Agent or such Bank shall have made any
demand hereunder and although said Obligations, liabilities or claims, or any of
them, shall be contingent or unmatured.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT
THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN
CALIFORNIA, NO BANK SHALL EXERCISE A RIGHT OF SETOFF, BANKER'S LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE THAT IS NOT
TAKEN BY THE REQUIRED BANKS OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT
OR THE REQUIRED BANKS IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT
(PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR
OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY OF THE
LIENS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE
ENFORCEABILITY OF THE
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NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY BANK OF
ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED BANKS SHALL BE
NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF
THE BANKS HEREUNDER AND MAY BE AMENDED, MODIFIED OR WAIVED IN ANY RESPECT BY THE
REQUIRED BANKS WITHOUT THE REQUIREMENT OF PRIOR NOTICE TO OR CONSENT BY ANY
CREDIT PARTY AND DOES NOT CONSTITUTE A WAIVER OF ANY RIGHTS AGAINST ANY CREDIT
PARTY OR AGAINST ANY COLLATERAL.
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to the Bank, at its address specified on Schedule II; and
if to the Administrative Agent, at the Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each Bank,
at such other address as shall be designated by such Bank in a written notice to
the Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
13.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Banks and,
provided further, that, although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments or outstanding Loans hereunder except as provided in Sections 1.13
and 13.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, provided further, that no Bank
shall transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment, shall not constitute a change in the terms of such
participation, and that an increase in any Commitment shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit
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Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Commitments
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to (i) its
parent company and/or any affiliate of such Bank which is at least 50% owned by
such Bank or its parent company or to one or more Banks or (ii) in the case of
any Bank that is a fund that invests in loans, any other fund that invests in
loans and is managed or advised by the same investment advisor of such Bank or
by an Affiliate of such investment advisor or (y) assign all, or if less than
all, a portion equal to at least $5,000,000 in the aggregate for the assigning
Bank or assigning Banks, of such Commitments and related outstanding Obligations
(or, if the Commitments with respect to the relevant Tranche have terminated,
outstanding Obligations) hereunder to one or more Eligible Transferees (treating
any fund that invests in loans and any other fund that invests in loans and is
managed or advised by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single Eligible Transferee), each of
which assignees shall become a party to this Agreement as a Bank by execution
(including by way of telecopier) of an Assignment and Assumption Agreement,
provided that, (i) at such time Schedule I shall be deemed modified to reflect
the Commitments and/or outstanding Loans, as the case may be, of such new Bank
and of the existing Banks, (ii) upon the surrender of the relevant Note or Notes
by the assigning Bank (or, upon such assigning Bank's indemnifying the Borrower
for any lost Note or Notes pursuant to a customary indemnification agreement)
new Notes will be issued, at the Borrower's expense, to such new Bank and to the
assigning Bank upon the request of such new Bank or assigning Bank, such new
Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Loans, as the case may be, (iii) in connection
with any assignment to an Eligible Transferee pursuant to clause (y) above, the
consent of the Administrative Agent and, unless an Event of Default is then in
existence and has theretofore been continuing for 30 consecutive days, the
consent of the Borrower, shall be required (each of which consents shall not be
unreasonably withheld or delayed), (iv) the Administrative Agent shall receive
at the time of each such assignment, from the assigning or assignee Bank, the
payment of a non-refundable assignment fee of $3,500 and (v) no such transfer or
assignment will be effective until recorded by the Administrative Agent on the
Register pursuant to Section 13.15. To the extent of any assignment pursuant to
this Section 13.04(b), the assigning Bank shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Loans.
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank and, with the
consent of the Administrative Agent, any Bank which is a fund may pledge all or
any portion of its Loans and Notes to its trustee in support of its obligations
to its trustee. No pledge pursuant to this clause (c) shall release the
transferor Bank from any of its obligations hereunder.
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13.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent, the Collateral Agent, the Issuing Bank or any
Bank in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Borrower or any other
Credit Party and the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Bank shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights,
powers and remedies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Bank would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Bank to any other or
further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations; Accounting Terms. (a) The
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks); provided that, except as otherwise
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specifically provided herein, all computations and all definitions used in
determining compliance with Sections 9.07 through 9.10, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare the
historical financial statements of the Borrower referred to in Section 7.05(a).
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day; except that
in the case of Letter of Credit Fees, the last day shall be included) occurring
in the period for which such interest, Commitment Commission or Fees are
payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT
SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
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VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower, the Administrative Agent and
each of the Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it. The Administrative Agent will give the Borrower and each Bank prompt written
notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
expiration date of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash), (ii)
release all or substantially all of the Collateral (except as expressly provided
in the Credit Documents) under all the Security Documents, (iii) amend, modify
or waive any provision of this Section 13.12 (except for technical amendments
with respect to additional extensions of credit pursuant to this Agreement which
afford the protections to such additional extensions of credit of the type
provided to the Term Loan Commitments and Revolving Loan
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Commitments on the Effective Date), (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loan Commitments and Revolving Loan Commitments
are included on the Effective Date) or (v) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement;
provided further, that no such change, waiver, discharge or termination shall
(u) increase any Commitment of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of any Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase of the
Revolving Loan Commitment of such Bank), (v) without the consent of the Issuing
Bank, amend, modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit, (w) without the consent of the
Swingline Bank, alter the Swingline Bank's rights or obligations with respect to
Swingline Loans, (x) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 or any other provision as same
relates to the rights or obligations of the Administrative Agent, (y) without
the consent of the Collateral Agent, amend, modify or waive any provision
relating to the rights or obligations of the Collateral Agent or (z) without the
consent of the Supermajority Banks, reduce the amount of, or extend the date of,
any Scheduled Repayment, or amend the definition of Supermajority Banks (it
being understood that, with the consent of the Required Banks, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Supermajority Banks on substantially the same basis as the
extensions of Term Loan Commitments and Revolving Loan Commitments are included
on the Effective Date).
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Commitments
and/or repay each Tranche of outstanding Loans of such Bank in accordance with
Sections 3.02(b) and/or 4.01(b), provided that, unless the Commitments that are
terminated, and Loans repaid, pursuant to preceding clause (B) are immediately
replaced in full at such time through the addition of new Banks or the increase
of the Commitments and/or outstanding Loans of existing Banks (who in each case
must specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Banks (determined before giving effect to the
proposed action) shall specifically consent thereto, provided further, that in
any event the Borrower shall not have the right to replace a Bank, terminate its
Commitments or repay its Loans solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
the second proviso to Section 13.12(a).
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13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 2.06 or 4.04 from those
being charged by the respective Bank prior to such transfer, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective transfer).
13.15 Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitment and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Commitment or Loan, or as soon
thereafter as practicable, the assigning or transferor Bank shall surrender the
Note or Notes evidencing such Loan, and thereupon one or more new Notes in the
same aggregate principal amount shall be issued to the assigning or transferor
Bank and/or the new Bank to the extent requested by such Banks. Upon receipt by
the Administrative Agent of such an Assignment and Assumption Agreement, the
Administrative Agent shall thereafter promptly distribute (including by way of
telecopier) a copy of such Assignment and Assumption Agreement to each of the
parties thereto, provided that the failure to so distribute the Assignment and
Assumption Agreement shall in no way affect, impair or diminish the transactions
contemplated thereby. The Borrower agrees to indemnify the Administrative Agent
from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.15.
13.16 Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 13.16, the Administrative Agent, the Collateral Agent and each
Bank agrees that it will use its reasonable efforts not to disclose without the
prior consent of the Borrower (other than to its employees, auditors, advisors
or counsel or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion determines that any such party should have access
to
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such information, provided such Persons shall be subject to the provisions of
this Section 13.16 to the same extent as such Bank) any information with respect
to the Borrower or any of its Subsidiaries which is now or in the future
furnished pursuant to this Agreement or any other Credit Document and which is
designated by the Borrower to the Administrative Agent, the Collateral Agent and
the Banks in writing as confidential, provided that the Administrative Agent,
the Collateral Agent and any Bank may disclose any such information (i) as has
become generally available to the public other than by virtue of a breach of
this Section 13.16(a) by the Administrative Agent, the Collateral Agent or
respective Bank, (ii) as may be required or appropriate in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over the Administrative Agent, the Collateral
Agent or such Bank or to the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (iii) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (iv) in
order to comply with any law, order, regulation or ruling applicable to the
Administrative Agent, the Collateral Agent or such Bank, (v) in the case of any
Bank, to the Administrative Agent or the Collateral Agent and (vi) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes, Loans or Commitments
or any interest therein by such Bank, provided that such prospective transferee
agrees to be bound by the confidentiality provisions contained in this Section
13.16.
(b) The Borrower hereby acknowledges and agrees that the
Administrative Agent and each Bank may share with any of its Affiliates any
information related to the Borrower or any of its Subsidiaries (including,
without limitation, any nonpublic customer information regarding the
creditworthiness of the Borrower and its Subsidiaries), provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Bank).
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address
SPECIAL DEVICES, INCORPORATED
00000 X. Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President
Telephone No.: (000) 000-0000 By: /s/ Xxxx X. Xxxxx
-------------------------------
Telecopier No.: (000) 000-0000 Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
and
copy to:
X.X. Xxxxxx & Company, Inc.
000 Xxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
BANKERS TRUST COMPANY,
Individually and as Lead Arranger
and Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxxxx X. Xxxx, Xx.
---------------------------
Name: Xxxxxxx X. Xxxx, Xx.
Title: Managing Director
000
XXX XXXX XX XXXX XXXXXX
By: /s/
------------------------
Name:
Title:
CITY NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
-----------------------
Name: Xxxx X. Xxxxxx
Title: Director
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxxxx
-------------------------
Name: Xxxx Xxxxxxxx
Title: Risk Manager
XXXXXX XXXXXXX XXXX XXXXXX PRIME
INCOME TRUST
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
112
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
PARIBAS
By: /s/ Xxxxxx X. Xxxxx
----------------------
Name: Xxxxxx X. Xxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
KZH STERLING LLC
By: /s/ Xxxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxxx Xxxxxx
Title: Authorized Agent
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
113
SCHEDULE I
COMMITMENTS
Bank Term Loan Revolving Loan
---- --------- --------------
Commitments Commitments
----------- -----------
Bankers Trust Company $ 6,000,000 $ 4,000,000
BankBoston, N.A. $ 8,000,000 $ 0
Xxx Xxxx xx Xxxx Xxxxxx $ 6,000,000 $ 4,000,000
City National Bank $ 3,000,000 $ 0
First Union National Bank $ 6,000,000 $ 4,000,000
General Electric Capital
Corporation $12,000,000 $ 4,000,000
Xxxxxx Xxxxxxx Xxxx Xxxxxx Prime
Income Trust $ 6,000,000 $ 0
National City Bank $ 5,000,000 $ 1,000,000
Paribas $ 6,000,000 $ 4,000,000
KZH Sterling LLC $ 6,000,000 $ 0
Union Bank of California, N.A. $ 6,000,000 $ 4,000,000
TOTAL: $70,000,000 $25,000,000
=========== ===========
114
SCHEDULE II
BANK ADDRESSES
Bank Address
---- -------
Bankers Trust Company 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
BankBoston, N.A. 000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
The Bank of Nova Scotia 000 Xxxxxxxxxx Xxxxxx - Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Telephone No.: (000) 000 0000
Telecopier No.: (000) 000-0000
City National Bank 000 Xxxxx Xxxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
First Union National Bank 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
115
General Electric Capital 000 Xxxx Xxxxx Xxxx
Corporation Building B, 1st Floor
Stamford, Connecticut 06927
Attention: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxxx Xxxxxxx Xxxx Xxxxxx Two World Trade Center - 72nd Floor
Prime Income Trust Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
National City Bank 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Paribas 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
KZH Sterling LLC c/o Sterling Asset Management
00 Xxxxxx Xxxxxx - 10th Floor
New York, New York 10038
Attention: Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Union Bank of California, 000 Xxxxx Xxxxxxxx Xxxxxx - 15th Floor
N.A. Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
